The Region
What part of the country you live in affects several remodeling decisions. Labor tends to be cheaper in the South than the Northeast, for example — enough so that Remodeling's annual survey prices the same master bedroom suite at $59,401 in Louisville, Kentucky, and $73,814 in Westchester, New York. Local factors also influence demand. Buyers everywhere will probably like a new, well-appointed family room. But fireplaces sell better in the North than in the South, and decks add more value in warmer climes. There are no hard-and-fast rules, but keeping an eye on local trends is a good way to ensure that your choices will appeal to house-hunters.

The Market
Where regional differences really come into play is in the real estate market. If housing is in great demand, buyers are likely to be willing to pay more for your improvements. Bethesda builder Scott says he billed $300,000 recently for an expanded kitchen, breakfast room, and study — the most expensive renovation per square foot he's ever done. But the couple got the money back when they bought an even bigger house last year. "Around the Washington, D.C., area, it's way different than Missouri," Scott observes. "People are paid an awful lot of money to be here."

Be careful, however. Even in a strong market, you can over-renovate. Brett Weinstein, a real estate broker in Oakland, California, has lived through the Bay Area housing boom. While prices remain high, he says, "if someone paid $200,000 over the asking price last year, they bought when the market was red hot. So if they want to spend $60,000 for a kitchen remodeling, they're going to have to live there a little longer to see that money back."
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