Cost Vs. Value 2023
The Minneapolis/St. Paul CVV report is out with a couple of surprises for kitchen/bath remodels
This year’s Cost vs. Value report continues the trend of exterior projects outperforming interior projects for immediate return on investment.
This report surveys more than 6,000 Realtors. They in turn review projects based on specifications and cost estimates along with photos and illustrations describing the projects. Finally, they must answer the big question: “What value does this project add to the sale price of a home?”
“For many years now, exterior projects have had the highest ROI, or cost vs. value over interior projects,” explains owner John Murphy. “This is primarily a first impression index of sorts because realtors are witnessing the obvious impact of a well-maintained exterior or one in desperate need of repair,” explains Murphy.
“There is an exception to that trend however,” Murphy says. “This year’s report shows homeowners can expect a 56% return on a minor kitchen update and a 67% return on a modest or midrange bathroom remodel,” says Murphy, which is higher than expected.
While larger more extensive remodels such as an upscale kitchen or master suite remodel may return maximum joy to the homeowner, it doesn’t influence the value of the home or necessarily lead to a higher ROI.
“That’s due to the fact that those discretionary aesthetic choices are highly individualistic and often those tastes don’t translate to others as easily,” explains Murphy.
Case in point, Murphy Bros. recently completed a modern-midcentury remodel of a home on the Mississippi River in Brooklyn Center that was eye-popping in many respects, but if modern midcentury isn’t your cup of tea, well its cool to look at, but you’d probably change it the second you moved in!
“The main thing to remember in the CVV report is that it is intended to tell sellers and buyers what to expect at the moment of sale. It is an indicator, but doesn't say much of anything about the level of investment you or anyone else wants to make or why,” concludes Murphy.
