According to Harvard’s Joint Center for Housing Studies, Americans spent $340 billion on remodeling in 2015.
With the significant time and money invested into remodeling, it’s important to strategically select projects. Homeowners aiming to enhance quality of life may have different priorities than those wanting to increase their property’s resale value.
New research makes those decisions a little easier. The National Association of Realtors partnered with the National Association of the Remodeling Industry to create the 2017 Remodeling Impact Report which details the returns of 20 interior and exterior remodeling and replacement projects.
Researchers measure payoff in three ways:
1) how much is added to the home’s resale value
2) how much the project appeals to buyers and
3) how much satisfaction it gives to the homeowner.
Here’s a look at the top projects in each category.
Highest resale value
The interior projects with the greatest percentage of their cost recouped at sale were
1) a hardwood flooring refinish
2) new wood flooring
3) an insulation upgrade
4) an HVAC replacement.
Remodelers quote a $3,000 cost for a hardwood flooring refinish with Realtors estimating $3,000 added to the home’s value for a 100 percent cost recovery at sale. Similarly, new wood flooring has 91 percent of the project’s $5,500 cost recovered.
For insulation, Realtors and remodelers estimate 76 percent of the $2,100 cost added to the home’s value. An HVAC replacement comes in at 67 percent, with $5,000 of the $7,475 cost recovered.
Going outside, the top projects for exteriors were
1) new roofing
2) a new garage door
3) new fiber-cement siding
4) new vinyl windows.
With a cost of $7,500 and a value of $8,150, new roofing actually makes money with 109 percent recovered.
A new garage door comes in at 87 percent with a $2,300 cost and $2,000 recovery. The fiber-cement siding recovery is 83 percent, or $15,000, of the $18,000 cost. Finally, experts estimate homeowners to recoup 79 percent of the $18,975 cost for new vinyl windows.
The high percentages recovered for exterior projects highlight the importance of having good curb appeal when selling a home.
Greatest buyer appeal
Realtors also rated the remodeling projects based on which ones would appeal most to buyers. For interiors, Realtors’ top projects were
1) a complete kitchen renovation
2) a kitchen upgrade
3) new wood flooring.
Realtors ranked a closet renovation, insulation update and attic conversion to living area as the projects with the least buyer appeal.
For exteriors, Realtors said the top projects were
1) new roofing
2) new vinyl windows
3) a new garage door.
New wood windows, a new fiberglass front door and new fiber-cement siding ranked lowest in terms of buyer appeal.
Best homeowner satisfaction
Of course, not everyone is looking to sell. For homeowners who want to increase their enjoyment in their home, the top remodeling projects are a new bathroom, complete kitchen renovation, new master suite, closet renovation and hardwood flooring refinish. Researchers gave every project a homeowner joy score and each of these projects came in at a 10, the highest mark.
The lowest ranked interior project for homeowner satisfaction was an insulation upgrade.
The exterior projects with the most homeowner satisfaction were new fiber-cement siding, a new fiberglass or steel front door, new vinyl siding and a new garage door. These projects received homeowner joy scores of 10, 10, 9.6 and 9.4 respectively. Windows ranked lowest with a score of 8.7.
The results of this study are based on estimates only. Project costs and value will largely depend on the unique aspects of the individual home and surrounding area.
“Realtors understand which remodeling projects and home upgrades will bring the most value to homeowners, whether they are remodeling with the hope of impressing potential buyers, bringing in higher offers or gaining more equity in the home,” said William Brown, president of the National Association of Realtors, in a statement about the remodeling report.
To learn more about how potential remodeling projects will affect the value of your home, contact a Northern Wasatch Realtor who knows your neighborhood. Search for Realtors at NWAOR.com.
2017 President, Northern Wasatch Association of REALTORS®