Kitchens Still SIZZLE as a Remodeling Investment!

Real Estate Agent with Boardman Realty Minnesota License#90858

No doubt there are many homeowners who would love to make a change to a different home but the current status of the real estate market has caused them to reconsider a move and opt for a remodel. But what the "what ifs" start creeping in too...Will I ever get the money back out of the remodel? Will the investment outweigh the value added to the home? If you are considering a kitchen remodel, it still could be good choice.

newsThe statement "Kitchens and Baths sell homes" is second only to "Location, Location, Location" in the real estate playbook. Okay we don't really have a playbook but the annual Cost VS Value Report for home remodels consistently shows that a higher percentage of funds used for a kitchen or bath remodel will be recouped on a sale than most other remodeling projects. In late December, the NAR released the 2008-2009 Cost VS Value Report for home remodels. This study looked at cost data, resale value and percentage recouped for 25 different projects in 80 housing markets across the United States. In Minnesota, if an homeowner does a major, mid-range kitchen remodel, he can expect to recoup about 72.7% of their expenses which is a little lower than the national average of 76% percent return on investment. A minor kitchen remodel, spending roughly $21,000 in Minnesota will be recouped at a rate of 73.3% again this is less than the national average of 79.9% but a reasonable return. (View all the statistics from the Cost vs. Value Report 2008 for the Mpls/St Paul area.)

Before a undertaking a kitchen remodel it is best to understand the "Why" of the project. Is it because your home-sweet-home is perfect except for a kitchen so small that people trip over each other on the way from the refrigerator to the table? Or is it because you want to move and the 1980's country blue counter and white department store brand appliances have seen better days and should be put out to pasture? The approach to the perfect remodel will be different if you are planning to stay in the home for the long term.

Take a Family Lifestyle Inventory
If you are designing the perfect kitchen for your family, take a lifestyle inventory. This is a process where you answer questions to understand what will be the most important needs specific to your family for the new space. It will help you and your designer to incorporate important details into your plan.

  • Consider cooking habits: One cook or two? Baker? Left-handed? Do you do dishes as you cook? Lots of Gadgets? Buy in Bulk? One oven or two?
  • Consider eating habits: Family gatherings? Everyone for themselves? Eat outdoors? Need morning sunshine? Entertaining?
  • Other Considerations: Flat screen TV in kitchen? Computer or home office needs? Homework? Laundry? Recycling? Will the family grow? Older relatives? Handicap Accessibility requirements?

All of these are things to consider when making a decision on whether and how to remodel your kitchen. Work with a designer or use a remodeling design software that will take into account the important specific needs of your family.

Hot Trends for Today's Kitchens

For a remodel to add value at resale, you must consider current needs and trends. So what are the hot for trends for kitchens today?

  • Open to Family Room or Great RoomCustom cabinetry in a variety of heights with lots of moldings and unique woods...Maple and Cherry are preferred to Oak.
  • Retro-look Appliances with Energy Star ratings.
  • Energy saving induction cook tops separate from ovens.
  • Ceramic tile back splashes.Green flooring choices like bamboo, cork and eucalyptus.
  • Sinks with instant hot water systems.
  • Pantries and abundant, easy access storage.
  • Multiple types of lighting (bright to work, indirect for mood). Avoid track lighting.
  • Windows for Natural LightQuartz-based granite-like product like Cambria, Silstone and Zodiac, for counters and islands, as health conscious people trend away from granite. Too expensive to do the whole kitchen in quartz? Consider just the island in the expensive stuff and do the rest of the kitchen counter in a complimentary colored laminate.

Stick to Your Budget

It can be easy to get caught up in the remodeling process and go over budget. Take time from the start to reflect on your family's needs and reasons for the remodel. Consider options that make the most sense for your family, budget and neighborhood. Make certain that the kitchen isn't designed and constructed at a quality far beyond the value of the rest of the home. Remember remodeling for family use tends to cost more than a remodel for resale.

If remodeling specifically to put your home on the market, go for the minor remodel and take into consideration the quality and condition of the rest of home. Remember you will not recoup 100% of your investment. The changes are being made to make the house more saleable in a down market. A good REALTOR® will give you the best advice as to what is necessary and what is over the top. If you are in an upscale neighborhood where homebuyers will expect high-end quality, don't make discount-store decisions. Likewise, if your home is in an area of modest or lower value homes, skip the granite and go for the laminate to replace the counters. Understanding the market place you live in will help make the best choices to recoup the most from your investment.

Spending a little extra time in the planning stage can reduce the headaches and heartaches of a construction project that does not meet expectations. Taking your time will allow you to make the wise decisions that add value to your most important financial investment, your home.

Wondering about a bathroom remodel?  Check out this article: Remodeling Investments for 2009: Bathrooms Continue to be a Good BET!

If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give me a call or visit my website for a FREE Relocation Packet or Homebuyers Success Packet. I specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

Buying a Home? Check out my new HOME BUYER'S BLOG!

Copyright 2009 Teri Eckholm



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Teri Eckholm. REALTOR with Boardman Realty, is a native Minnesotan who has lived and worked in the Minneapolis St Paul metro all of her life. She specializes in lakeshore homes, acreage properties and first time home buyers but assists anyone making a move in the north and east Twin Cities metro.

If you are buying, selling or relocating to Minnesota and need help from a professional REALTOR®, give Teri , a call or visit her website for a FREE Home Buyer Success Guide or FREE Home Value Report She specialize in acreage and lakeshore properties in the north and east Twin Cities metro area including Ham Lake, Lino Lakes and all communities in the Forest Lake School District! Serving Anoka, Chisago, Ramsey and Washington Counties in Minnesota.

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Margaret Woda
Long & Foster Real Estate, Inc. - Crofton, MD
Maryland Real Estate & Military Relocation

I love that report and refer to it often.  Great way to use the information!

Feb 01, 2009 02:13 PM #29
Marchel Peterson
Results Realty - Spring, TX
Spring TX Real Estate E-Pro

Another GREAT post!!  I love the new picture.

Feb 01, 2009 02:19 PM #30
Roland Woodworth
Q Realty - Clarksville, TN
Q Realty - Power In Real Estate

Teri: What a great and informative post.. A kitchen can make or break the sale of a home.

Feb 01, 2009 03:11 PM #31
Bob & Carolin Benjamin
Benjamin Realty LLC - Gold Canyon, AZ
East Phoenix Arizona Homes

In this market we can't recommend that someone upgrade in hopes of selling faster, at more money , etc -- in this market , here in Arizona anyway , this is not a good reality.

Feb 01, 2009 03:12 PM #32
Jason Neumann
Century 21 Assurance Realty Ltd. - Kelowna, BC
Realtor -

Teri lots of good information and well said in terms of the other things that help to sell homes.  Whenever I talk to sellers who are also thinking of renovating the first thing we talk about is the kitchen.  Take care and happy blogging!

Feb 01, 2009 06:46 PM #33
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~

That is good to know that kitchen remodels still bring value

Feb 01, 2009 10:40 PM #34
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

Joan--I think that is an important consideration even if the remodel is for yourself. You never know when you will have to move and if you put in too (or too little) it really will affect your bottomline and ability to sell.

Lynda--Exactlly...make sure the kitchen will work for your family first. :)

Terry--That was not a smart move! Be conscious of what you are spending because you will never get it all back.

Lenn--I am with you on this. I do counsel some sellers to make minor cosmetic changes like removing dated wall paper and updating lighting and plumbing fixtures. Sometimes a new laminate counter or adding a over-the-range microwave. Usually under $1000, the updates will pay off. But major remodels are not recommended for the sale of a home...Especially in this market!

Paul--That is the best way to update...gradually and with a budget!

Feb 02, 2009 12:33 AM #35
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

Jennifer--Mine too! Kitchens and bathrooms sell homes!

Gary--Thanks! I try to do an update on this information every year as it is very important to most homeowners.

Lizette--Those beautiful kitchens make an impression with the buyers...Outdated ones do too but they are memorable for the wrong reasons!

Patricia--Hmmm...I will have to give Silstone another look for my new countertops. (Updating for me not a sale!)

Bill--It certainly can make or break whether or not the buyer even considers the property.

Feb 02, 2009 12:39 AM #36
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents
Lyon Real Estate - Sacramento, CA
Put 40 years of experience to work for you

Hi Teri: Do you know that I grew up in Circle Pines? Grades 1 through 6 at Centennial. Loved your kitchen remodel piece. I used Cambria quartz in my kitchen remodel last summer. Also, another green choice in flooring is marmoleum planks. I would think that would be very popular in a climate such as Minnesota's.

Elizabeth Weintraub Land Park Real Estate Agent in Sacramento

Feb 02, 2009 12:45 AM #37
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

Anonymous--Buyers are discerning in this down market but remodeling to sell is risky in a down market. Best to make simple inexpensive changes if you need to sell now as most money won't be recouped.

Donald--We all know how important that kitchen really is don't we?

Sandra--Thank you...making smart choices for your family is what it really is all about when you remodel.

Barbara--Thanks...I have seen too many homes with overdone (and underdone) improvements.

Scott--Agreed! If you are not going to recoup 100% why would you remodel only thinking about what future buyers might want...You have to put YOUR families needs first when remodeling and stick to a budget!

Feb 02, 2009 12:46 AM #38
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

Art--Have you been taking out my buyers? :) Absolutely...with all the inventory buyers have to choose from, they won't bother envisioning anything...they just move on. Smart updates in this market. Ask a REALTOR what makes sense.

Karen--I agree...he is a very smart man!

Connie--This is a scary market to do a major remodel. Sound like they made a smart move in calling in a local real estate expert before making the changes.

Carla--LOL...Didn't forget the bathroooms. I posted that article last week. Just added the link above.

Diane--Bathrooms are important too...And a good bet. I added a link to last weeks post above.

Feb 02, 2009 12:53 AM #39
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

Michael--They certainly are the heart of the home!

Kathy--Thank you!!

Carole--Glad you enjoyed the post. It is important to consider what the family wants and needs first but take resale into consideration because you never know when you will have to make a move.

Anthony--If they are going to do any upgrades, those are the two areas to consider first.

Douglas--Good point. These numbers are for my market in the Twin Cities metro area but the report does give different numbers for another 70-80 cities. Probably for that very reason.

Feb 02, 2009 12:58 AM #40
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

Tim--In the upper price range certainly granite and stainless are a must! Lower price ranges any newer appliances can help along with a neutral laminate counter and new flooring!

Gina--Some sellers do get it and their homes sell much more quickly. But in this market, they have to be very smart about any remodel.

Kristi--Going GREEN is hot and helps sell these days!

Margaret--It is great information for any homeowner...knowing how much you can expect to recoup on a remodel is knowledge that a homeowner cannot do without.

Marchel--Thank you! :)

Feb 02, 2009 01:05 AM #41
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

Roland--Kitchens and baths are the things buyer scrutinize the most!

B&C--I don't think anyone should do a remodel in this market just in hopes of selling either. Maybe a few updates but nothing major. Better to lower the price and take the hit that way.

Jason--Sellers need to consult with local experts like yourself before upgrading just to sell as doing the wrong updates can be costly.

Russ--While nothing is 100%, more funds spent when remodeling a kitchen can be recouped than in other areas of the home.

Elizabeth--I didn't know that..Circle Pines is a very small community. I have a wonderful townhouse listed there right now! People love the Centennial School district! I will have to look into marmoleum planks. I have seen some bamboo flooring in models around here, which is also considered greener, but us practical Minnesotans are very cautious about trends. :)

Feb 02, 2009 01:14 AM #42
Brian Madigan
RE/MAX West Realty Inc., Brokerage (Toronto) - Toronto, ON
LL.B., Broker

If you know in advance that you are only going to get three quarters of your money back, why undergo the time and effort. why not bank the money and put it into the next house?

Brian Madigan

Feb 02, 2009 07:55 AM #43
Kris Kombrink ~ The Kombrink Team
RE/MAX Excels - Chicago's Western Suburbs - Geneva, IL

Right on with this post here, Teri! With a tough economy people are cooking more at home and they need something they can move around in.

Feb 02, 2009 08:13 AM #44
Joyce Windschitl Hercules
Prime Mortgage - Chanhassen, MN
MN, FL, WI & CO Mortgage Consultant

Nice post.  People do have a vision but find it more difficult when it includes more than flooring and paint.  To me, the kitchen and baths are very important.  Why not update them now, enjoy them instead of updating and then selling. 

Kitchens go out of style quicker than any other room.  My daughter put an offer on a house that needed the baths and kitchen redone.  In her calculations she included new appliances.  I told her if she would like mine she could have them and I will buy new - they would be perfect for her upgrade and the type of house.  Meanwhile I feel I have contributed in a good way.

Feb 03, 2009 05:34 AM #45
Mesa, Arizona Real Estate Mesa Arizona Realtor
Homes Arizona Real Estate LLC - Mesa, AZ

Teri, yet another good post. Most of the appraisers here in our area aren't even looking at the bells and whistles including granite in the kitchen or a pool anymore. I personally think though that the points you mention about kitchen and bath are HUGE selling features. ;-)


Feb 03, 2009 08:43 AM #46
Teri Eckholm
Boardman Realty - White Bear Lake, MN
REALTOR Serving Mpls/St Paul North & East Metro

Brian--If you are only planning to update to move I would only spend on those items that are detrimental to the sale of the home.  But homeowners who are not moving but are considering upgrading should do it smart as they will not recoup 100% should they need to sell a year or two down the road.

Karen--People need to enjoy their homes as it is more difficult to sell and move up in this market. Upgrading to a kitchen you love to be in is a smart move.

Joyce--Exactly! And upgrades don't have to break the bank...just make sense. I have had clients buy at "scratch & dent" appliance stores to get great deals on new upgraded appliances to make their home more saleable.

Teri--They rarely ever did look at the upgrades around here to add value. But I have recently seen appraisals noting the poor condition of homes and knocking the value for it. Buy what you want but choose wisely as you will not recoup what you have invested if you overspend.

Feb 03, 2009 11:49 PM #47
Kathleen Lordbock
Broker/Short Sale & Staging Specialist - Crosby, MN
Keller Williams Realty Professionals

Different price points demand different kitchens - consult a RE expert as to what you should proceed on before you start.

Feb 14, 2009 07:45 AM #48
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Teri Eckholm

REALTOR Serving Mpls/St Paul North & East Metro
Looking to buy or sell in the Twin Cities? Contact Me Today!
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