The second most tangible value of a kitchen remodel, just after its new beauty and functionality, is its return on investment. At sale, a kitchen remodel average return on investment can vary according to kitchen size, scope and complexity of the remodel, and the geographical location of the home. What do they all have in common? An incredible, if not the best, return on investment for your home!
Kitchen Remodel Categories and Definitions
As compiled in the Remodeling 2023 Cost vs. Value Report (www.costvsvalue.com), Kitchen remodels fall into three categories: Minor Kitchen Remodel, Midrange; Major Kitchen Remodel, Midrange; and Major Kitchen Remodel, Upscale.
Let’s start with a common definition of each category.
Minor Kitchen Remodel, Midrange1
Functional but dated 200-square-foot kitchen with 30 linear feet of cabinetry and countertops, leave cabinet boxes in place but replace doors and drawers, including new hardware. Replace cooktop/oven range and slide-in refrigerator with new energy-efficient models. Replace laminate countertops; install mid-priced sink and faucet. Add new resilient flooring. Finish with painted walls, trim, and ceiling.
Major Kitchen Remodel, Midrange1
Update outdated 200-square-foot kitchen with functional layout of 30 linear feet of semi-custom wood cabinets, including 3×5-foot island; laminate countertops; and standard double-tub stainless steel sink with standard single-lever faucet. Include energy efficient range, vented range hood, built-in microwave, dishwasher, garbage disposal, and custom lighting. Add new resilient flooring. Finish with painted walls, trim, and ceiling.
Major Kitchen Remodel, Upscale1
Update outdated 200-square-foot kitchen with 30 linear feet of top-of-the-line custom white cabinets with built-in sliding shelves and other interior accessories. Include stone countertops with imported ceramic- or glass-tile backsplash; built-in refrigerator, commercial-grade cooktop and vent hood, wall oven, and built-in microwave unit. Install high-end undermount sink with designer faucets and water filtration system. Add new general and task lighting, including low-voltage undercabinet lights. Install tile or similar flooring that looks like wood.
National Kitchen Remodel Average ROI
Minor Kitchen Remodel, Midrange1
Job Cost: $26,790
Resale Value: $22,963
Cost Recouped: 85.7%
Major Kitchen Remodel, Midrange1
Job Cost: $77,939
Resale Value: $32,574
Cost Recouped: 41.8%
Major Kitchen Remodel, Upscale1
Job Cost: $154,483
Resale Value: $48,913
Cost Recouped: 31.7%
Takeaway
While construction commodity costs as an average fell slightly over the last year, so did average construction costs. But with the rise of corporate homebuyers flipping and raising the costs of homes at an alarming rate, and with interest rates continuing to climb, ROI for high-dollar remodels just aren’t possible. While it was possible to get roughly $50k out of your $100K kitchen remodel last year, those days are gone for now.
Kansas City Metro Kitchen Remodel Average ROI
Minor Kitchen Remodel, Midrange1
Job Cost: $28,327
Resale Value: $20,478
Cost Recouped: 72.3%
Major Kitchen Remodel, Midrange1
Job Cost: $82,580
Resale Value: $28,564
Cost Recouped: 34.6%
Major Kitchen Remodel, Upscale1
Job Cost: $164,137
Resale Value: $43,969
Cost Recouped: 26.8%
Takeaway
While minor kitchen remodels continue to hold a bit of resale value, major kitchen remodels have increased in cost by $10k (average) and have plummeted in ROI to a 10-year record low. With non-stop residential development in the KC metro and the saturation of husband-and-wife corporate homebuyers causing massive increases in home prices, there seems to be no limit on home cost inflation.
No matter how perfect you think your new luxury kitchen is, you can’t simply add $50k-$80k to a sale price that is already 30% higher than last year.
Summary
Kitchen remodel ROI may be crashing, but there’s a foolproof way to beat that: remodel to improve your quality of life! Treat yourself to the remodel you want, the quality of life improvement you deserve, and live with it! Enjoy it! And when the market corrects, watch your home become way more attractive than your neighbors because you didn’t wait.
Contact Mortise & Miter today to find out how great your return on your kitchen investment could be!
Source
[1] Remodeling 2023 Cost vs. Value Report. © 2023 Hanley Wood, LLC. Complete data from the Remodeling 2023 Cost vs. Value Report can be downloaded free at www.costvsvalue.com