Home / Cost vs value
Cost vs value, explained
"Cost vs value" compares what a remodel costs with what it adds to a sale price. Here is how that comparison is made, what it leaves out, and why your region matters so much.
The one ratio that matters
Percent recouped = resale value added ÷ job cost. If a $20,000 siding job raises the likely sale price by $17,000, it recoups 85%. You are $3,000 "down" at sale, but you also lived with new siding.
The best-known source for these figures in the US is Remodeling magazine's annual Cost vs. Value report. It prices a fixed specification for each project (a 200-square-foot kitchen, a 5×7-foot bathroom) and then surveys real-estate professionals on how much that project would add to a home's value in their market.
The National Association of Realtors publishes a companion survey, the Remodeling Impact report, which asks agents and homeowners the same kind of question and adds how much joy each project brings owners.
Same project, different region
Cost and value do not move together. Labor in the Pacific states is expensive, but so are houses, and buyers there pay more for upgrades. In the East South Central states the job is cheaper but buyers pay less too. Pick a project and step through the nine US Census divisions to see how each lever changes the result.
Pacific
Cost ×1.20 · resale value ×1.28
Minor kitchen remodel recoups 102% in Pacific, versus 102% at best (Pacific) and 83% at worst (East North Central).
How to read a cost vs value figure
- It is an average for a standard spec. Your kitchen is not 200 square feet with exactly those finishes. Scale your expectations with the kitchen calculator.
- Value is an opinion. Agents estimate what buyers would pay. In a hot market everything looks better; in a slow one, worse.
- It assumes you sell soon after. A kitchen remodeled ten years before sale is no longer "new".
- It ignores what you save by preventing a discount. A roof may recoup 60% but save you a much larger price cut after inspection.
- It ignores your own use. The NAR survey found owners rate joy highly for projects with middling payback, like kitchen upgrades.
A single percentage is easier to trust once you have played with the parts that produce it; ahaboo is built on that idea, with narrated explainers you can poke at until the mechanism clicks.
Turning the averages into your number
RenovROI applies two adjustments to national planning figures. First, a regional factor on cost and another on value, by Census division (see ROI by region). Second, a home-value factor: a $30,000 project on a $180,000 house is more likely to overshoot the neighborhood than the same project on a $600,000 house. The methodology page spells out the formula.
Frequently asked questions
What is the Cost vs. Value report?
It is an annual study published by Remodeling magazine (Zonda) that compares the average cost of common remodeling projects with the value real-estate professionals estimate they add at resale, nationally and for regions and metro areas.
Where does the resale value figure come from?
In that report, the resale value is an opinion survey of real-estate agents and appraisers, not a record of actual sale prices. It is a well-informed estimate, but still an estimate.
Is RenovROI the same as the Cost vs. Value report?
No. RenovROI is independent. Our planning figures are adapted from the typical ranges in published cost-versus-value research and adjusted by region and home value; we do not reproduce the report's data.
Why do figures change year to year?
Material and labor prices, interest rates and how hot the housing market is all move either cost or perceived value. A project can slip several places in one year without anything changing about the work itself.