From Remodeling Magazine:
While the overall changes since last year are modest, Remodeling’s latest Cost vs. Value report reflects the robust market that the remodeling industry has enjoyed over the past year.
All projects covered in the report show an increase in value over the previous year, as reported by real-estate professionals in 136 metro areas.
However, costs have correspondingly increased — and in some cases, the increases are significant, likely due to tariffs that have roiled commodity markets. This has led to slight downturns in the percentage of costs recouped for a number of projects, but overall returns still show slight increases compared to last year.
Noticeably, there has been a small uptick in the year-over-year percentage change for upscale projects. Historically, big-ticket discretionary remodeling projects tend to provide a lower rate of return than more modest replacement projects. But these days, year-over-year changes in the percentage of costs recouped from upscale projects have increased at a greater rate, suggesting that buyers of existing homes are willing to invest a little more for opulence.
Value is fickle that way. In leaner times, buyers tend to become more frugal with their choices, opting to invest in more modest projects. A push of any sort towards extravagance is a strong sign of consumer confidence.
