Major Home Remodeling Not Paying Off, Report Finds

"Very few people are going to remodel and sell the house tomorrow," he said. "If you're going to redo the kitchen, it's not because you're going to sell the house in the next month."

But psychologically, the current conditions present the flipside of what happened during the years when appreciation was high in many areas and people were eager to remodel, figuring "why not improve your home and let it ride the roller coaster up?" Baker said.

Fewer home sales also contribute to a decline in remodeling projects, because when a defect is discovered during a home inspection, that often will inspire a project, said Rodney Rice, co-chief executive of ServiceMagic, which operates a Web site that links homeowners to prescreened service professionals. If an improvement isn't necessary, it may not be done.

While remodeling is slowing on a national basis, that doesn't mean all parts of the country are experiencing the same sluggishness. As in all matters real estate, conditions are often individual to the particular area.

In the Cost vs. Value Report, for example, the average amount a homeowner can recover for a minor kitchen remodel in the Pacific region is 103.5 percent, reflecting the continued strength of some housing markets such as Seattle, Alfano said. Nationally, the return on that project is 83 percent, he said.

In weaker markets, remodeling might be on the wane as home buyers come across reduced prices or concessions for new homes on the market, he added. That might prompt some homeowners to buy new rather than remodel their current home.

In another example of how the strength of the remodeling market is local, a recent ServiceMagic report looked at the number of requests from homeowners to be matched with a home-improvement professional. Requests dropped 14.75 percent in Fort Lauderdale, Fla., this summer compared with last summer. But requests were up 67.4 percent in Rochester, N.Y.

Dean Herriges, a remodeler in Mukwonago, Wis., said that high-end remodeling hasn't slowed in his market for people who plan to stay put for several years and are able to finance most of the project without tapping their equity.

In fact, in areas where remodeling is slowing, it is easier getting a contractor on the phone -- a change from recent years, Baker said.

There also could be new contractors to choose from, as some of the new-home builders try to move into remodeling, Alfano said.

But it's important to choose a contractor carefully, Alfano said, since remodeling is different from home building.

In fact, the differences, including the challenge of matching existing materials, sometimes push home builders back out of the business.

"What we typically find," he said, "is that new-home builders who move into a remodeling market on a temporary basis hang in there for 18 months, and give it up or go back to new construction."