[anna]

Kelly and Chabuchie, you are totally making my lunchbreak with these posts about faux-"distressed" kitchens. That sounds like something you'd see on a particularly bad episode of Trading Spaces.

I must say, IKEA cabinetry is very common even in $800k+ apartments in NYC. You'll see them paired with Viking ranges, SubZero fridges...and I don't think they're decreasing the resale value. Seriously, even in less insane real estate markets, I think a buyer is typically looking for a kitchen that they're not going to have to replace in the near future. I don't see how relpacing outdated 80's oak cabinetry with an IKEA kitchen could do anything but increase the value of a house.

(Unless, of course, you're in a "turnaround" area like me, in which case you should feel lucky if your house even has functional plumbing, much less cabinets with doors on them!)

One more example of IKEA usage to add to the pot: My aunt (a private art teacher) and uncle (a modernist architect) live in a pretty ritzy part of Westchester County in an incredible 1920's house that they've owned and have been adding on to for about 40 years (easily worth over $1mil), and they just re-did the kitchen. What did they use? KALSEBO beech cabinets and PRAGEL stone effect black countertops. Yes, there are lots of fancy touches like a Viking range, marmoleum flooring, and custom-built shelving, but it's an IKEA kitchen. The previous kitchen had been put in in the 60's, and while it was cute, it wasn't functional with modern appliances...and they're planning to sell the house in the next few years. I doubt anyone considering buying it would look at their kitchen and say, "Ugh, let's move on...this is CHEAP SWEDISH FLATPACK!"

[Brodysmom]

anna wrote:

I must say, IKEA cabinetry is very common even in $800k+ apartments in NYC. You'll see them paired with Viking ranges, SubZero fridges...and I don't think they're decreasing the resale value.

This is so true! The Ikea certified installer who did my cabinets, works mostly in Manhattan.

[designenvy]

anna wrote:

I must say, IKEA cabinetry is very common even in $800k+ apartments in NYC. You'll see them paired with Viking ranges, SubZero fridges...and I don't think they're decreasing the resale value.

And here is a perfect example

[kelly]

This is a great photo- I believe that what you're seeing is a Frigidaire- the duo of all freezer all refrigerator made famous by Sharon Osbourne's kitchen (subzeros, of course). the beauty of this installation is that you can get the look and the capacity for about $2k instead of $10K.

thanks for sharing the appliance photos!!

[inafix]

Most ppl just care that it looks like nice and could give a crap who made it.

[djrobsd]

The joy of an IKEA kitchen is that if you don't like it in 5 years, you don't have to start over, as long as they don't go changing the base cabinet specifications. Simply remove the doors from their hinges and buy new ones. Replace all cover panels, and viola... New kitchen on the cheap!!!

[Kashka-Kat]

Resale schme sale

whoooooo cares as long as it looks nice. Nobody asks what brand the kitchen cabinets are, do they?

Actually in my neck of the woods an Ikea kitchen is a huge plus. Definitely an improvement over the usual slumlord crap style found around here in former investment housing which is slowly turning over to more owner occupied -- I swear these people who buy properties for investment must think "how can I do this as cheap and ugly as possible." And in the process completely trash anything that was remotely interesting architecturally about the place.

[Ikea in Utah]

I spent many years in real estate sales. Bottom line no one cares where your cabinents came from. They are looking for style and age. If the cabs appear new and functional that is all that matters. Real estate value is total based on what similar house in similar condition sold for. Outside of HGTV no one really prices a house based on the cost or perceived cost of cabinents, window coverings etc. You will never see a competent appraiser deducting $10 or even $100 for a cheap kitchen tap, nor will you see a deduction for IKEA cabs vs custom made or any other brand. At most they will compare similar houses and may adjust down for poor condition and up for better than the comparable condition.

[kelly]

This thread is one of the first I ever posted on when I joined IKEAFANS in August , 2006. Now, in early 2008 I have my own IKEA kitchen and am thrilled with the functionality, beauty and fiscal responsibility it represents! Here's a thread I posted today that brings me full circle on my IKEA experience!

______________________________________________________

I spend a lot of time thinking about my finances- it's true. Regardless if you do or not, I'd like to share my thoughts about why the current housing market makes an IKEA kitchen a better move than ever before.

Everyone contemplating a remodel is or should be familiar with the resale value of typical home renovations, with kitchens, bathroom, exterior siding renovations returning some percentage (50-85%) of the investment. This tool is handy for understanding these guidelines:

REMODELING Online: Home remodeling, kitchen and bath design, renovation, and building products for the professional remodeler

And of course, we are all familiar with the unimpeachable rule of investing: buy low, sell high. There are 2 ways to do this with housing:
Buy and hold, with housing naturally increasing with value over time
Buy and improve, with improvements increasing the value

In both cases we are talking about the margin- the difference between what you paid, with expenses such as interest payments, maintenance and improvements, and what you received at sale. The first is time value and the second is added value.

Wait a minute, the US housing market is in the tank! Many people paid more for their houses than they could now turn around and sell them for; and even if they did not pay too much, they will have to wait much longer for that home to appreciate significantly. So, it's time value that's in the tank.

Which leaves you with adding value, which provides you with two great outcomes: 1) enjoyment of the asset while you live there 2) the only way you have of adding to the value of your home.

In the current market, buyers are looking for deals, which means that they want discounts on value- they want to cut into your margin. So, falling home prices require that home improvements must be economical- you must maintain the margin in your home improvements, despite buyers taking discounts on it. How do you do that??

DIY is an outstanding way of building more margin into your home improvement investment.

A mid-level kitchen renovation is expected by the market to cost $20k. That means that your kitchen looks like others that cost about $20k. This is how real estate valuation works- comparables, not actual cost. Labor costs are 40% of that $20k (probably higher than that, but let's be conservative). Let's say you get a generous 80% of that $20k investment back in resale, so $16k. You lost $4k.

If you eliminate the $8k (40%) of labor costs, so your $20k kitchen cost $12k and you get $16k out of it. You just made $4k.

So that's DIY. What if I don't have the skills or the time to DIY?? What about IKEA?

My IKEA kitchen reduced the cost of my renovation by half, with some labor hired out. If you poll the people on this site, you'd find similar numbers.

In this example, I'll still use the midlevel kitchen remodel which looks like others costing $20k, and which you can expect a resale value of $16k out of. Remember this is how real estate valuation works- comparables, not actual cost. I'm still assuming that the materials make up $16k of the $20k expense as in the original example.

But, with IKEA, this kitchen will cost you $8k, or 50% less than the $16k of materials in the first example. Remember, there is $4k on the table for labor which you can retain by doing it yourself (the work is the same regardless of what kitchen you choose). So, if you hire someone to do your IKEA kitchen, you will pay $12k ($8k materials + $4k labor=$12k). Remember, the $16k resale value is for kitchens that look like those which cost $20k. In this example, an IKEA kitchen installed by a professional nets you a margin of $4k.

Let's go over that again: Build in a profit margin of $4k (IKEA with an installer) OR build in an upfront loss of $4k (other cabinets with an installer).

There's another issue...where would the $20k come from? Most of us would have to take a loan. That'll cost you 7.5% annually (I'm not going to go into deductibility of home improvement loans- if you can figure out that benefit to yourself, you don't need to read this). Let's say you live in the house 3 years, that's an additional $4,500 in interest costs ($1,500 x 3). The $20k kitchen now costs $24,500- you've now built in a loss of $8,500.00 ($24,500 cost - $16,000 resale value).

A $12k loan at the same APR will cost you $2,812 over three years- so that $12k IKEA kitchen professionally installed will cost $14,812- you've STILL built in a gain of $1,188, even if you finance (at a reasonable rate- if you finance on a credit card at 24%...well, that'd cost you $8,640 in financing over three years, or $20,640, which builds in a loss of $4,640- STILL 46% BETTER THAN THE ORIGINAL ASSUMPTION of a loss of $8,500 @7.5%!).

And of course, DIY with IKEA means even more margin. So, let your buyer think they got the better of you at closing- it won't cost you ANYTHING to let them think they won.

[ianai]

I'm in the middle of remodeling my kitchen with all IKEA cabinets and countertops, and would chime in my vote that the features and ultimately the build quality definitely increase the homes value.

One of my best friends is helping me, and he is a contractor by trade - primarily kitchen and bathroom remodels. He was blown-away.

When we started putting together the base cabinets he said the same drawer rails are used in the most expensive cabinets he's put in, and that 90% of everything he's seen or touched can't hold a candle to them. Then, on the the cabinet doors - blown away again. I think he might have had a chuckle when we started pulling flat packs out of my garage, but from start to finish he was amazed by the quality of the product...oh, and then there was the price. A kitchen full of Kalsebo Beech cabs, loaded to the hilt with features for $3500.

16 fully extending dampered drawers, dampered doors that can be removed in 15 seconds for cleaning - or replacement, the thickest laminate countertops of all time he just kept blurting out remarks of amazement. He must have said "tell me how much you paid for this again" twenty times - this from a guy who knows his kitchens ;-)

So I agree with above sentiments that anyone in the housing market that opened and closed the drawers, doors, etc would most likely fall in love with the functionality of an IKEA kitchen. If I ever sell, I'll be leaving a copy of the consumer reports reviews in one of the drawers, and if it comes down to it offer a $1000 dollar door replacement allowance to a reluctant potential buyer - 'll spawn a new colony with my Kalsebo ;-)