CNNMoney has some interesting numbers that point to the fact that home improvements, usually known as a good investment in a higher selling price, just aren't pulling their weight in today's down housing market.
"Pay-back for high-end projects has declined over the past few years," said Kermit Baker, chief economist for the American Institute of Architects (AIA). "People planning to sell shouldn't over-improve," he said. "They won't get the money out if they sell in the next two or three years."
NAR's survey revealed that returns on investment for a wide range of high-end interior redecorations dropped in 2007. An upscale bathroom renovation cost an average of $50,590, nationally, but only added $34,588 to house value - a 68.4% return. In 2006, a high-end bath renovation returned 77.4% of its cost.
Adding a brand new bath didn't pay off as well either, earning just a 69% return in 2007, compared with 72.8% in 2006. High-end kitchen remodels held up better, adding value equal to 74.1% of the cost, compared with 75.9% in 2006.
I know we were bit in our housing purchase by not negotiating enough over certain home improvements that were necessary. And when we sold our house the one thing we thought was our largest asset (the acreage) turned out to be its biggest liability (everybody added the cost to landscape it on top of the sale price). (Read)