According to a recent report, American homeowners are projected to spend more money in 2015 on home improvements and renovations than they did the previous year, continuing a trend that has formed a familiar pattern over the past few years.
There are several reasons for this increase – a stronger economy, a recovery in home prices, and stimulus programs offered by the states designed to spur investment in energy-efficient upgrades.
The 2015 Remodeling Cost vs. Value Report is created by Remodeling Magazine, in cooperation with REALTOR Magazine and the National Association of Realtors. In the report, 36 mid-range to upscale home improvement projects/renovations were ranked in over 100 US cities across the country.
The goal of the report is to give the average cost for a properly-performed professional job in each of the categories, along with a description of what each job should entail. For the sake of accuracy, the report is also broken down by region and by selected cities.
The “value” portion of the report is represented as the percentage of a project’s initial cost that could be recouped if the house were to be re-sold.
One interesting tidbit from the report is the fact that homeowners in metro areas tend to spend 50% more on home improvement projects then homeowners living in non-metro areas.
There were three big takeaways from the report –
1. Replacement projects cost less and provide a better resale value than remodeling jobs or additions.
2. Obvious projects that a new buyer can immediately notice provide great payback. First impressions are critical.
3. The Pacific Region – California, Washington, Oregon, Alaska, and Hawaii – gives the biggest return on investment, with six different projects that typically add more than 100% of the cost in added resale value.
In the real estate industry, it is a generally-accepted rule of thumb that any home improvement or renovation that returns more than 75% of the initial investment in added resale value is an improvement that is well worth doing.
The reason for this is that in addition to added resale value, an improvement also has merit if it (1) is likely to increase the interest or attention of potential buyers, thereby possibly leading to more offers, and (2) if it benefits the current homeowner in some way – increased comfort level, better energy efficiency, or heightened pride of ownership.
Here are eight great home improvement projects that add real, tangible value to your home.
8. Wooden Window Replacement: (78.8%)
Average Cost: $ 11341
Average Added Value: $ 8937
Project Description: Replace ten existing double-hung windows, size 36” X 60”, with vinyl-or-aluminum clad insulated wooden windows. Outside trim is wrapped in aluminum coil stock to match, if necessary, and inside trim is untouched. Opening size remains unchanged.
Why windows? Good-quality replacement windows improves your home in several ways—energy efficiency, reduced maintenance, and a fresh, modern appearance.