When the housing market slows down people often opt to stay put and renovate their current home to make it more livable. It can be a smart move because they get a double benefit…they get to enjoy it themselves while they live there, as well as make it more appealing to buyers should they decide to sell in the future. According to statistics compiled by the National Association of Realtors it can also make financial sense…the return on home owners' investments in remodeling projects has declined less than overall housing values.
Remodeling magazine compiles a report on Cost vs. Value of remodeling projects each year in cooperation with REALTOR magazine. This year's results show that nationally home owners can expect to recoup an average of 67.3% of their investment in 30 different home improvement projects in 2008…down from 86.7% in 2005. It varies depending on where you live, with the highest payback along the Pacific Coast.
The Top Ten Project Paybacks are all related to siding, decks, kitchens and windows. Windows rank high as buyers and sellers 
alike are paying more attention to energy efficiency and realize that the return on investment for windows can be pretty favorable.
The 30 projects tracked are listed below with average job cost and estimated percent of cost recouped at time of sale in the Minneapolis-St. Paul metropolitan area. They are ranked by highest rate of Return on Investment (ROI). Of course, perhaps the greatest value is in the enjoyment of use for the sellers while they live there…and the appeal to buyers when they sell. It may not be so much getting a higher price as getting a property sold because the improvements give it greater buyer appeal.
- UPSCALE Siding Replacement (fiber-cement) – $13,256 – 79.9%
- Deck Addition (wood) – $10,378 – 76.1%
- Siding Replacement (vinyl) – $10,227 – 74.3%
- UPSCALE Siding Replacement (foam-backed vinyl) – $12,227 – 74.0%
- Minor Kitchen Remodel – $21,185 – 73.3%
- Major Kitchen Remodel – $56,307 – 72.7%
- UPSCALE Window Replacement (vinyl) – $13,545 – 72.4%
- Window Replacement (wood) – $11,518 – 71.6%
- Window Replacement (vinyl) – $10,518 – 70.6%
- Deck Addition (composite) – $15,154 – 69.1%
- UPSCALE Window Replacement (wood) – $17,548 – 68.7%
- UPSCALE Major Kitchen Remodel – $110,386 – 66.0%
- UPSCALE Bathroom Remodel – $51,057 – 65.5%
- Basement Remodel – $60,437 – 65.2%
- Attic Bedroom – $47,931 – 65.1%
- Bathroom Remodel – $15,753 – 64.8%
- Two-Story Addition – $145,632 – 64.8%
- Garage Addition – $55,907 – 62.2%
- Family Room Addition – $80,624 – 61.0%
- UPSCALE Bathroom Addition – $73,660 – 60.4%
- Master Suite Addition – $100,552 – 60.2%
- UPSCALE Deck Addition (composite) – $37,252 – 59.3%
- UPSCALE Garage Addition – $84,352 – 57.9%
- UPSCALE Roofing Replacement – $35,216 – 57.2%
- UPSCALE Master Suite Addition – $221,534 – 56.5%
- Roofing Replacement – $18,176 – 56.4%
- Sun room Addition – $71,173 – 55.7%
- Bathroom Addition – $37,567 – 55.0%
- Home Office Remodel – $28,054 – 50.7%
- Back-Up Power Generator – $13,969 – 48.1%
