Remodeling Face-Off: Kitchens vs. Bathrooms

by Steve CookMay 31, 2018

The two rooms of a house that make or break most home sales are bathrooms and kitchens, which explains why those two rooms dominate the remodeling business. Last year, bathroom renovations edged out kitchens as the most popular remodeling project by a margin of 81-to-78 percent. At 49 percent, renovations of entire homes were a distant third, according to a survey by the National Association of Home Builders.

Man in blue shirt and glasses applying ceramic tile to a bathtub enclosure wall.

Though both rooms top the popularity list for remodeling, the value that they add to a home’s sale price is almost always less than the costs of remodeling. Very few remodeling projects pay for themselves by recouping their costs when the house is sold. As a general rule, the more a project costs, the lower its cost versus value ratio will be. Baths and kitchens are two of the most expensive rooms to renovate. The losses that result from renovating these rooms can be significant.

The 2017 Remodeling Impact Report, a joint study by the National Association of Realtors and the National Association of the Remodeling Industry, found kitchen and bathroom upgrades and renovations topped the list of projects included in the study in terms of importance to buyers. Yet, when it came to recouping remodeling costs at the sale, kitchen and bathroom projects returned less than replacing roofing (109 percent cost/value ratio), adding new wood flooring (91 percent cost/value ratio,) and adding new vinyl windows (79 percent cost/value ratio).

A yellow ladder sits in the middle of a kitchen with white counter tops and cabinets.

The NAR/NARI study also estimated the enjoyment homeowners get from renovations. These “joy scores” were calculated based on the happiness homeowners reported from their renovations. Both bathrooms and kitchens earned joy scores at the top of the list of projects, ranging from 9.6 to 10, while most projects that were more cost-effective scored lower.

In the Remodeling 2018 Cost vs. Value Report by Remodeling Magazine, kitchens generally fared better than bathrooms. The Remodeling Magazine study broke out kitchens and baths into mid-range and upscale cost categories and also provided a regional breakout to reflect differing costs of labor and supplies. As in the NAR/NARI study, less expensive projects fared better regarding cost versus value than more expensive ones.

Regarding cost versus value, kitchens fared slightly better than bathrooms in the Remodeling Magazine study. Ratios for bathroom remodels ranged from 56.2 percent for upscale projects to 70.1 percent for mid-range projects. Kitchens ranged from 53.5 percent for a major upscale kitchen remodel to 81.1 percent for a minor mid-range kitchen.

This data will help owners who are making remodeling decisions factor resale values into their choice. Though kitchen remodeling projects cost more, cost/value ratios between bathrooms and kitchens are comparable.

When it comes to making remodeling decisions, the toxic impact that an outdated bathroom or kitchen will have on prospective buyers is probably more important than the cost/value ratio. Not many buyers will be willing to spend tens of thousands of dollars to bring either a kitchen or bathroom up to their standard so they will pass on a home that is otherwise in good shape. Sellers may decide that the best course will be to bite the bullet and pay whatever it takes to upgrade or renovate these rooms.

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About The Author
Steve Cook
Steve Cook is editor and co-publisher of Real Estate Economy Watch. He is a member of the board of the National Association of Real Estate Editors and writes for several leading Web sites, including Inman News. From 1999 to 2007 he was vice president for public affairs at the National Association of Realtors.