Return on Investment

With the United States in an economic recession and the housing market in turmoil, spending money on a kitchen remodel might seem scary. Yet while home prices have declined, a kitchen remodel continues to add value to your home. How much depends on where you live and how you spend your dollars. According to the 2009-010 Cost vs. Value Report*, a minor kitchen remodel still ranks in the top 10 home improvment projects in terms of return on investment. Seven of the remaining nine in the list are exterior replacements like siding and windows, which tend to be less expensive projects than kitchens and also fall into the "must-do" rather than "nice-to-do" category.



The numbers reported below are national averages; in general, the Pacific states region outperformed the rest of the nation despite higher costs. For example, on the West Coast, a minor kitchen remodel averages a cost of $23,210, with a return of 94.8 percent. In the Great Lakes region, however, the same project costs $21,899, with a return of just 69.4 perecent.



Minor Kitchen Remodel, Mid-Range
The 2009-10 report puts the national average price of a mid-range minor kitchen remodel at $21,411, averaging a return of 78.3 percent (down just a tad from last year’s 79.5 percent) a year later. What is a minor kitchen remodel? According to Remodeling, it’s a 200-square-foot kitchen with 30 linear feet of cabinetry and countertops. The cabinets get refaced with new raised-panel wood doors, drawers and hardware, but the boxes stay. Laminate countertops and vinyl flooring are removed and replaced with the same material, but in updated colors and patterns. You also get a new, energy-efficient wall oven and cooktop, a new mid-priced sink and faucet, wall covering, and a new paint job on your trim.



Major Kitchen Remodel, Mid-Range
A major kitchen remodel at a mid-range price will run an average of $57,215, according to the report. A year later, you can expect to recoup 72.1 percent (down from 76 percent) of that. This 200-square-foot kitchen features a 3-by-5-foot island, 30 linear feet of semi-custom wood cabinets, laminate countertops, and a double-bowl stainless-steel sink with single-lever faucet. Add new energy-efficient appliances: wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposal, and custom lighting. Finish up with new vinyl flooring and paint for the walls, trim and ceiling.



Major Kitchen Remodel, Upscale
Price tag: $111,794, according to the report, with an ROI of 63.2 percent (down from 70.7 percent). It's an easy bill to run up in a 200-square-foot kitchen with 30 linear feet of custom cherry cabinets with interior accessories, natural stone countertops, and an imported ceramic or glass tile backsplash. Appliances include a built-in refrigerator, cooktop, 36-inch commercial-grade range and vent hood, built-in warming drawer, trash compactor and built-in microwave/convection oven. Then add a high-end undermount sink; designer faucets; built-in water filtration system; general, task and under-cabinet lighting; cork flooring; and cherry trim.



*The 2009-10 Cost vs. Value Report—a joint study done by the National Association of Realtors and Remodeling magazine—provides national and regional averages. The report estimates the cost of an average home improvement project and compares it to the value it would recoup if the home sold a year later. In 2009, more than 4,000 real-estate agents, brokers and appraisers in 80 cities provided ROI estimates.