A recent report by the National Association of Home Builders revealed that high home prices limited housing availability are leading more homeowners to stay put and renovate their existing homes. Now Remodeling magazine is providing some hard data about just what those renovations could mean when it comes time to sell those homes.
Remodeling has released its 2018 Cost vs. Value Report, which “compares average cost for 21 popular remodeling projects in 149 markets with the value those projects retain at resale in 100 U.S. markets.” Topping the list, with an average of 98.3 percent of cost recouped at resale, is garage door replacement. That job costs an average of $3,470, according to Remodeling, and has an average resale value of $3,411.
Rounding out the rest of the top 10 projects that retain the most value at resale are:
- Manufactured Stone Veneer—97.1 percent
- Entry Door Replacement (steel)—91.3 percent
- Deck Addition (wood)—82.8 percent
- Minor Kitchen Remodel—81.1 percent
- Siding Replacement—76.7 percent
- Window Replacement (vinyl)—74.3 percent
- Universal Design Bathroom—70.6 percent
- Bathroom Remodel—70.1 percent
- Window Replacement (wood)—69.5 percent
The average payback for 20 of the most common remodeling projects declined year-over-year, dropping from 57.9 percent in 2016 to 56.8 percent in 2017. According to Remodeling, “That’s mainly because the cost of doing those projects went up for all 20, while values rose for only about two-thirds of them.”
Remodeling expects prices for building materials to continue trending upwards in 2018, especially given the spate of natural disasters affecting various portions of the country in the last half of 2017, from hurricanes to wildfires to mudslides. Remodeling’s report adds, “Expect, as well, an even greater shortage of skilled workers in disaster-struck markets as those workers struggle to fix up their own homes and employers feel pressure to respond with pay hikes.”
For its 2018 Cost vs. Value Report, Remodeling used construction cost estimates generated by RemodelMAX and Clear Estimates remodeling software. According to Remodeling, “Construction cost figures include labor, material, and subtrade expenses, plus industry-standard overhead and profit. Note that project costs are based on estimates for generic projects. They do not account for personalized design and product choices made by homeowners in connection with actual remodeling projects, nor do they account for local and short-term fluctuations in pricing, supply and demand, and other factors affecting cost.”
Resale value data for each project was based on estimates from more than 4,600 real estate professionals, provided via an online survey conducted by Hanley Wood between August and October, 2017.