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Major changes add resale value, but Pittsburgh trails national average in this regard

Friday, March 07, 2003

By Sarah Billingsley, Post-Gazette Staff Writer

For most sane Americans, the thought of living through a major remodeling project inspires fear and dread. There's the dust, the noise, the chaos. The kids complain. The fumes give you headaches.

But Realtors and real estate appraisers agree that remodeling projects are the only improvements you can make to your home that have a chance of yielding a big return. Remodeling adds value to your home.

If you're looking to sell, small fixes and cosmetic changes, such as a thorough cleaning, painting, refinishing cabinetry and woodwork and laying neutral carpet, will help your home sell. These changes create a clean, appealing space a buyer can imagine moving into.

But to add real dollars onto the price tag of your home, you need to make some major changes, increasing living space, adding amenities and updating your home.

Remodeling a bathroom, kitchen or basement, building a family room addition, adding a deck, replacing siding, roof or windows and adding or remodeling a master suite are the major jobs that add thousands -- sometimes tens of thousands -- of dollars to the value to your home, not to mention making it a more enjoyable, comfortable place to live.

Though stock prices have declined, home values remain steady. Interest rates are currently so low, it's inexpensive to finance a renovation now through a home equity loan or line of credit.

Remodeling magazine publishes a yearly "Cost vs. Value" report that approximates how much value a remodel can add to your home, based on information compiled by Realtors and appraisers in 35 metro housing markets. Pittsburgh-area Realtors from Howard Hanna, Coldwell Banker and Infiniti Realty participated in the 2002 report (see the Web site, www.remodeling.hw.net).

According to the report, Pittsburgh is below the national average when it comes to making up for remodeling costs through resale price. Nationally, home owners recoup 88 percent of their bathroom remodeling costs, on average; Pittsburgh sellers recoup 54 percent.

A bathroom remodel that includes replacing fixtures, installing a ceramic tile tub surround and floor, a vanity counter with double sink and recessed medicine cabinet and hanging wallpaper will cost, on average, $10,120, but add only $5,500 to the resale value of your Pittsburgh home.

Closer to the national average, finishing your basement to create an entertainment area with full bath, wet bar, recessed lighting and laminate floors, at an average cost of $43,433, will add approximately $33,250 to the value of your home, 77 percent of what you paid, close to the national average of 79 percent.

Remember that in construction, you get what you pay for: the value of the work you do is in the quality of the construction.

And, of course, the value of a home is dependent on more than what you put into it. What is the value of other homes in your neighborhood? For a neighborhood in decline, recouping costs in unlikely. Value is dependent on the market for resales. The only way to know your value is by researching prices by talking to local real estate agents or by searching the Internet.

San Francisco leads the national average in remodeling cost regained -- along with Fairfield-New Haven, Conn., the Washington, D.C. area, Oakland, Calif., and Los Angeles. There, homeowners often make back more than 100 percent of what they put into the job.

In Pittsburgh, you may not get a return on every penny you put toward remodeling, but you will slowly, consistently add value to your home. Try not to be too depressed that home improvements -- like cars -- depreciate with every passing year.