Home Economics

A Tale of Two Kitchens
511 West 232nd Street, Riverdale

Apartment W52: Sold for $189,000
Apartment W42: Sold for $214,000 (+12%)

It’s kind of a moving target,” says appraiser Jonathan Miller. “Consumer sentiments change over time.” In the early nineties, for instance, when the city was beset by foreclosures and distressed properties and buyers were enamored with fixer-uppers, what a kitchen brought to an apartment’s overall value—the so-called contributory value—was about 50 cents on the dollar, meaning owners would only get half of what they put into it, dollars-wise. Having a renovated kitchen back then helped call attention to a property, but it didn’t sell it. Same for the dot-com-boom years, says Miller, when buyers adored the “white box loft” aesthetic and wanted to fashion raw space for themselves.

Not so these days, with inventory so tight and buyers loath to take on time-consuming renovations. Most sellers can, on average, get back dollar-for-dollar what they put in for an average face-lift—stainless steel, granite countertops. A six-figure redo, however, with a Viking stove, Sub-Zero fridge, and Miele dishwasher, and bearing the stamp of a name-brand architect, may fetch a little more because, Miller says, “there’s so little inventory, which means you have a little bit of irrational behavior in some segments of the market.” In other words, people are willing to pay more to get the apartment, or kitchen, they want. In percentage terms, kitchens with basic renovations will likely nudge the value up 5 to 10 percent—so if it’s a $1 million apartment, the kitchen could be worth $50,000 to $100,000—while posh revamps could raise it 15 percent.

Above are two same-size one-bedrooms with the same layout and square footage in the same Riverdale building, but while apartment W52 has a serviceable kitchen, the one in the unit below, W42, was refurbished with new cabinets, granite countertops, and stainless-steel appliances. The premium for a renovated kitchen in this scenario could be reasonably estimated at $25,000—or 12 percent of its sales price.

So why do kitchens matter so much in New York—when so few people use them?
“Usage has no bearing on price,” Miller says. In the city, kitchens are an amenity, “a feature to be touted, something above and beyond a basic item.” That’s because with space so limited, kitchens are viewed as rooms for entertaining and not just places to cook three meals. Kitchens matter more here, he says, because “their overall square footage—while generally smaller in an apartment than in a suburban house—is a larger percentage of the whole apartment.”

Home Economics