The 2015 Cost Vs. Value Report

Remodeling Magazine's annual Cost Vs. Value report was just recently released.

I believe that it is a good idea for DIY'ers and pros to look at the report. As a DIY'er you can
see how much its supposed to cost and you can compare what you actually paid to
the projected cost to figure out your new, better payback.

For the pros you can see how your numbers match up to average costs and if your numbers
are way higher you better have a good explanation locked and loaded.

This also is a good time to talk about whether or not you believe in any of it.
Half of the report seems reasonable. Pro contractors bid the jobs described. The other
half of the report,....well,... Real Estate Pro's (including the reptile realtors) somehow decide
how much the completed jobs will increase the value of the house. Ahem, sounds a bit
hand-wavey to me...

That and I haven't come across a single construction pro who thought the numbers where valid.
At best they are numbers to get you in the ballpark.

Lets take a look a at couple of specific jobs from the Upscale Projects Section.

DECK ADDITION (COMPOSITE)
Add a 16-by-20-foot deck using pressure-treated joists supported by 4x4 posts anchored to concrete piers. At one corner, add a second, 10-foot-diameter six-sided platform one step down from the main deck. Include stairs on the smaller deck, assuming three steps to grade. Install composite deck
material in a simple linear pattern. Trim the perimeter joists and wrap the 4x4 posts with composite materials to match the decking. Using the same decking material, include a built-in bench and planter along one 16-foot side. On the remaining perimeter, provide a railing system using composite material of and trim should provide contrasting or complementary colors that includes decorative balusters, post caps, and lighting. Railing for overall curb appeal to the outdoor living space by integrating the deck with the home’s color and architecture, creating a custom look.
cost=$45219 Value=$46879 Cost Recouped=103.7%
Wow, a plastic deck is worth more than a quality tropical hardwood deck? Wha?

GARAGE DOOR REPLACEMENT
Remove and dispose of existing 16x7-foot garage door and tracks. Install new 4-section garage door on new heavy-duty galvanized steel tracks; reuse existing motorized opener. New door is high tensile strength steel with two coats of factory applied paint and foam insulated to minimum R-12 with thermal seals between pinch-resistant panels. Windows in top panel are ½-inch insulated glass. Hardware includes galvanized steel hinges and ball-bearing urethane rollers. Lifetime warranty.
Cost= $3298 Value=$5150  Cost Recouped= 156.2%
So, I've three garage doors and if I replace them all I'll have........a jillion dollars! Did I do that
math right?

GRAND ENTRANCE (FIBERGLASS)
Remove existing 3-0/6-8 entry door and cut and reframe opening for a 12-36-12 entrance door with dual side lites. Move double gang electrical box with two switches. Fiberglass door blank matches upscale entry, including color, threshold, lockset, and decorative half-glass; side lites match door. PVC-wrapped exterior trim in color to match existing trim; wider interior colonial or ranch casings (3.5-inch to cover new jack studs) in hardwood stained to match door. All work to be completed in one day.
Cost=$8475  Value=$9942  Cost Recouped=117.3%
Wow again, fiberglass is the upscale choice.

SIDING REPLACEMENT (FIBER-CEMENT)
Replace 1,250 square feet of existing siding with new fiber cement siding, factory primed and factory painted. Include all 4/4 and 5/4 trim using either fiber-cement boards or cellular PVC.
Cost=$18587  Value=$23963  Cost Recouped=128.9%
I guess fiber cement is long lasting and can come factory painted.

WINDOW REPLACEMENT (VINYL)
Replace 10 existing 3-by-5-foot double-hung windows with insulated, low-E, simulated-divided-lite vinyl windows. Simulated wood-grain interior finish; custom-color exterior finish. Trim exterior to match existing; do not disturb existing interior trim.
Cost=$12867  Value=$13640  Cost Recouped=106.0%
Yay, vinyl!!!!
 

WINDOW REPLACEMENT (WOOD)
Replace 10 existing 3-by-5-foot double-hung windows with insulated, low-E, simulated-divided-lite wood windows. Interior finish of stained hardwood; exterior finish of custom-color aluminum cladding. Trim exterior to match existing; do not disturb existing interior trim.
Cost=$20296  Value=$23559  Cost Recouped=116.1%
Finally a wood thing returns decent value...
 
Those are all the projects on the upscale side that return more than 100%.

I don't know if any of the above makes sense. It seems like we are seeing other
factors rolled up with those numbers. Currently houses around here are appreciating
like mad. In the upscale list of jobs the lowest performer was 83.6% for a master suite addition
while the national ave return is only 53.7%.

Or, in other words, 'Real Estate is Crazy Around Here.'



 





 

What Will Our Project Cost 2010-11 Version

Remodeling magazine is out with their new Cost Vs. Value report for 2010-11.
To see the main page of the report go here. Its fun to see what potential home improvements will cost in your area...try it. No shock that AGAIN the SF Bay area has the highest costs....
To see the SF Bay area specific numbers go here.
To see how the SF Bay area numbers have changed over the past 2 yrs go here.

As before I believe that the cost values have a much stronger grounding in reality than do the value added numbers. The cost numbers are generated by Home Tech Information Systems which makes their money providing estimating software to contractors.

The value numbers are generated by asking appraisers, insurance adjusters and real estate agents how the project would effect the value of the house... While I could be convinced that an appraiser and insurance adjuster could have a meaningful opinion on this...Realtors??? Hmmmm....

Below I have reproduced a table comparing costs and values between this year and last for projects that we are contemplating doing on our house. Of course there is not an exact match but these projects are close enough for government work.

Midrange Projects
	2009-10			2010-11
Project Name	Job Cost	Resale Value	Cost Recouped	Job Cost	Resale Value	Cost Recouped
Attic Bedroom	$65,829	$67,531	102.6%	$70,938	$74,206	104.6%
Deck Addition (wood)	$13,642	$14,196	104.1%	$15,091	$17,025	112.8%
Major Kitchen Remodel	$67,789	$67,815	100.0%	$71,015	$67,583	95.2%
Master Suite Addition	$132,443	$114,104	86.2%	$143,853	$123,003	85.5%
Roofing Replacement	$26,242	$22,664	86.4%	$28,699	$21,821	76.0%

If you click on the descriptions on the left it should bring you to a cool page with a description and cool 3-d renderings.
First you'll notice that all of our costs went up!!!! Hurray!!!!, Wait, isn't there supposed to be a recession on and rampant unemployment in the construction trades??? Guess not in the SF Bay area....

What Will It Cost
It looks like if we got all the work done at the same time it would cost .......wait for it....

$329,596!!!!!

Woo-Hoo we're rich!!!! Oh wait, no we're not...

What 'Value' Will It Return
If you can believe the numbers all the above improvements will add....
$303638

That's a difference of -$25,958....

Wouldn't it be nice if you could really, really believe the numbers above...
Ass-sue-ming the numbers are semi-believable I still say that this makes a good case for DIY'ing as much of a project as possible.

If by DIY'ing some of the work yourself you can get that total cost down to say $275k then you would of actually increased the value of your house past what it cost and you'd get a nice net return when you sell it....ya right.

Wow, actually those numbers are kinda depressing...who has that kind of money to spend now a days?

If we could get the entire house redone for that $329k we'd have a nice-legal 2000sq ft 3-3 on the top two floors and a legal 1000sq ft 2-1 rental unit on the bottom floor....wonder what the house would be worth then?

Let's see... 1831 San Jose just sold for a cool $1M and our house is bigger (legally) but on a smaller lot....so that means our house would be worth $1M right??? Right???? Ya right...that's the kind of thinking that makes houses sit on the market for 80 gazillion months with no price drops...

Anywho, use the cost vs value numbers at your own risk...but when looking at a house that's going to 'need some work' I think looking at the costs and considering them to be good base numbers is a good way to go.... So, if some Realtor tells you, you can do a master suite addition in the attic for $40k you'll know that they are FOS.

What Things Cost in the SF Bay Area

As a follow-up to our previous post I thought it would be a good idea to discuss some of the costs we've had with this place. What we thought we paid for, and what we got for our money.

First off, 'The Kitchen Designer'

Irene did all the right stuff. She checked Angie's List and a couple local lists and got three names for us to talk to. We interviewed them all and settled on one that seemed to be what we needed. She said she did all her work in Chief Architect, her prices seemed reasonable and we liked her initial ideas.

I sent her .dwg files of the house and scaled pdfs for her to start her designing process. She couldn't figure out how to get the .dwg files into Chief which really annoyed me. When I got my copy it took me like 5 min to do it without reading the manual. This makes me think she only had the light version of the program which does not allow you to import files.

After waaaay too long and a lot of back and forth we met with her to view her initial designs. All she had done was printed out a copy of our floorplan and put a couple pieces of tracing paper over it so she could doodle out some ideas. About 20 min into this meeting I realized that she had maybe spent the hour before this meeting whipping out these 'designs'. Designs that ignored the things we told her were important to us and designs that were impossible to do in reality. She had things like the stove in a spot where you couldn't open the oven door while someone was seated at the dinner table? I was mostly annoyed because we told her specifically that we wanted to see things in 3-d done in Chief. Come to think of it I never saw any proof that she had the program or knew how to use it. It literally takes 10 min to whip out a basic kitchen in Chief if you know what you are doing...

So, for her three designs she did, we got one useful thing - switch the fridge to a new place to make the prep sink easier to use.

Price tag for one good idea $600

Kitchen Cabinets

We shopped around all the local quality cabinet shops, and for the cabinets in our initial kitchen design the prices ranged from $17-$37,000 for just the cabinets, installation and counter tops would be extra.

Next, we turn our attention to the idea of an architect to help us design out our master plan for the house.

Architect Costs

We went through the same drill and came up with three names. We interviewed them and were again shocked at what it costs. The arch. who showed up in the brand new $100,000 Por-shaaaaa wanted $24,000 to do the design and permit ready drawings. The two other guys were not much different. They all want a % of the building costs or budget...which I think is an inherent conflict of interest as the more expensive the house is the bigger their fee.

So we completely gave up on that idea....until Irene found this guy. He's a local architect. Lives in Alameda on a boat and is a retired professor of archetecture. He works in auto cad and knows the people at the Alameda building dept. He could read our .dwg files and was able to do a couple of designs...He made a couple of stabs at the top floor and the kitchen. I think he made one good suggestion in the kitchen...uh it was the tall pantry cabinet in the sunroom I think.

After weeks and weeks of weird lame excuses from him, he could never come through with any kind of finished design. He finally came over one Sunday afternoon and.....he was drunk....yep, we picked ourselves a drunkard for an architect.... We asked him to not come back after that.

Total cost for one good kitchen idea? $200

What really burns us is that we lost like six months to this process.

Quotes from Design-Build Firms

We covered this in an earlier post but to refresh: We've heard from 3 design-build firms so far and the prices they are all quoting are around $300-400 /sq ft. Heck, two of them said that doing a simple bathroom would cost $40,000.

Not to defend these numbers but we are talking about quality contractors, the kind that get their work in magazines like Fine Homebuilding.

So, thats what some of those things cost...I could do a run-down of all the costs for all the major projects we've done but that feels like TMI.