Remodeling worthwhile? California vs Massachusetts Differences

East vs West – Remodeling Coast to Coast

Great seaports, airports, city parks and universities are not the only similarities that link Boston and San Francisco. New Englanders and Californians also know the importance of adding value to their real estate investments as the recent edition of RemodelingOnline, Cost vs. Value Report 2007 indicates.

Each year the National Association of Realtors publishes the findings from this report for their members to assist them in advising their homebuyer and seller clients of the comparative value of certain home improvements to the sales value of their personal and investment properties. This data is compiled by HomeTech Information Systems, a remodeling estimating software company based in Bethesda, Md., which regularly collects current cost information from a nationwide network of remodeling contractors and suppliers and applies an adjustment factor to account for regional pricing variations.

As the following figures show, the New England and Pacific regions are among the top areas of the country where the ultimate value of remodeling projects outweighs the relative costs of the improvements.

While costs for similar improvements vary from region, some improvements provide a greater return than others depending on the region. Additionally in California, where prices and demand are higher the overall value of improvements is also higher. Interestingly enough, in both Northern and Southern California and Massachusetts' Essex, Middlesex, Norfolk, Plymouth and Suffolk counties, the most cost effective improvements are those made to the outside of the home. The addition of a wooden deck in the Pacific region at an average cost of $12,812 tops the list of added value by returning 108% of the cost. The same improvement in New England ranks in the top three at a cost of $10,634 with a return of 84.4% to its value. New England’s harsh winters contribute to their highest ranked improvement being replacement of siding which at a cost of only $9,900 returns 91.7% of its value upon resale. Ranking 2nd on both coasts is a minor kitchen remodel which costs only slightly more on the West coast at $22,698 compared to $21,516 in New England, but returns 103.5% of it’s value in the West and 86% on the East coast. Window replacements are high on the list of investment return in both regions with a hefty return of 102.9% (3rd highest) and a cost of $13,120 in Northern and Southern California and 81.3% (4th highest) with a cost of $10,702 in Massachusetts.

Overall, many improvements are well worth their cost in investment return while others might be worth reconsidering if the intent is to improve the property for a recent sale. On the other hand, if you are looking to buy a property it’s useful to know which improvements have cost the seller more than their resale value and which you can afford to make yourself to add future value to the property. It’s also a useful tool in comparing similar properties with varied improvements.