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Seattle P-I: Remodeling Cost Still Worth It
Last updated December 9, 2007 9:46 p.m. PT
Painful price to remodel is still worth it
Unlike the nation as a whole, renovations pay off at resale in Seattle
By AUBREY COHEN
Fixing up an old Seattle kitchen tends to pay off when a home sells.
Adding a sunroom? Not so much.
Those are two of the findings from the newly released 2007 Remodeling Cost vs. Value Report from the National Association of Realtors and Hanley Wood, a business media company based in Washington, D.C.
Nationally, none of the 29 projects in this year's report pay for themselves. Returns on investment range from 57 percent for a home office remodel to 88 percent for adding fiber-cement siding.
But, in Seattle, 13 projects more than recouped their cost, led by minor kitchen remodels, which brought a 126 percent return. Sunrooms were Seattle's least cost-effective project, recouping just less than 73 percent of their cost.
Why does remodeling pay off so much better in Seattle than in other places?
The city's relatively strong housing market helps, said Mike Flynn, an agent with John L. Scott's University Place office and regional vice president for the National Association of Realtors. In places where the real estate slowdown is more pronounced, projects might do more to bring offers in than add to the price, he said.
The report blames declining nationwide remodeling returns on the housing slowdown and rising remodeling costs. In 2005, all of the 22 projects covered in the report returned at least 70 cents on the dollar in resale value nationwide, compared with 23 of 26 projects in 2006 and 16 of 29 projects this year. Before empty-nesters Stan Wiczulis and Joyce Boewe sold their Phinney Ridge home last year so they could downsize, they replaced the mid-1980s Formica countertops with granite and updated sink fixtures.
"When we were walking through (the house) with our agent, she said: 'Here's a couple things that would really bump up the appeal of the kitchen, and you're going to get it back on the sale of the house,' " Wiczulis recalled.
The house sold within a week, although, given the still-frenzied market of the time, it's hard to say how much the granite had to do with the quick sale or the ultimate price.
The Realtors' nationwide report emphasized the value of exterior renovations -- including siding, wood decks and window replacement. These also were among the projects with the best return in Seattle.
"It's just like a job interview," Flynn said. "You've got one shot at a good first impression."
But replacing decent wood siding with fiber-cement siding doesn't make sense in the way it can to tear out Formica countertops to make way for granite, local Realtors and contractors said.
"If you're going to fix the house up to sell it, get a good paint job and be done with it," Denny Conner, who owns Conner Remodeling and Design in Seattle.
Local contractors say the most popular projects involve upgrading small, old Seattle houses for modern tastes and lifestyles.
"A lot of people love living in the city," said Leif Jackson, who owns Seattle's Jackson Remodeling with his brother, Erik.
"We're noticing a lot of people are finishing basements to get that extra square footage, converting attics to master suites," he said. "A lot of people are updating kitchens that haven't been remodeled since the '60s."
Lori and John Roeller's old Seattle house was big enough for them, at first.
"We bought the house not expecting that we were going to have children," Lori Roeller said. But they ended up with two children, and then John Roeller got a job that involved working from home.
They thought about expanding their second floor, but contractors told them they'd get more for their money by finishing their basement. Lori Roeller said they considered resale value in their remodel, but it did not cause them to cut anything out of the project.
Return on investment actually isn't a big factor for most homeowners, Jackson said. "They're doing this to make the house suit their needs for the next 10 or more years."
Which projects to do and how to do them also depends on how long people plan to stay in their home, contractors said.
"My stock answer for 30 years has been 50 percent of what you spend on your project will pay off immediately," said Gary Potter, who owns Potter Construction in Seattle. "The other 50 percent will pay back in five years."
Adding a bathroom to an old house or finishing a basement will pay off a lot faster than erecting a second floor, Potter added. Conner said people planning to sell within five years should focus on projects with better potential returns, using materials and layouts with a broad appeal, while those planning to stay put for a while can look more at what they want.
Which brings this story back to Wiczulis and Boewe and their new 1949 home, in Meadowbrook.
They knew they'd have to do something about the tiny, "Barbie pink" bathroom and small, galley-style kitchen. And Wiczulis, a self-described foodie, wanted something more personalized out of this kitchen remodel.
"What I really wanted to have was something that fit not just spatially, but really fit my needs as a guy in the kitchen," he said. "I wanted my knives to be in a certain place. I wanted my oil, my spices to be in a certain place."
Resale was not a concern, Wiczulis said. "This house is going to be our final stop."
The online version of this article was posted here.