- 'Greige' (subtle yet powerful) improvements pay off the best.
- This year's report reflects continued optimism for the housing market.
- Replacements beat remodels and exteriors beat interiors.
The 2017 Cost vs. Value report by Remodeling magazine documents the national and regional costs and ROI (return on investment) for 29 popular home improvement projects.
Overall, these 29 improvements paid back 64.3 cents on the dollar in resale value.
What that says to the homeowner is that spending money to sell a home requires research.
The goal of improvements from a seller’s standpoint is to attract buyers and achieve top dollar on a listing. But finding the balance between updates and return isn’t that simple.
In a seller’s market, spending (significant amounts of) money on improvements for resale may not translate to added value. As the tide turns to a buyer’s market in the next year or so, agents will need to carefully track ROI numbers to advise sellers.
Those surveyed about the return on remodeling projects were licensed agents, so Remodeling Editor-in-Chief Craig Webb says the report is a reflection of confidence in the industry:
“I think that this year’s Cost vs. Value report actually reflects the general optimism that both remodelers and Realtors have about the state of the housing economy. We are building more and more homes, slowly in this country, but that’s rising. Remodeling activity is as active as it’s ever been in history. And so, consequently, the prospects are good for everyone involved in the process: the consumer, the remodeler, the Realtor.”
Why the top 10 doesn’t matter
National numbers don’t really mean anything to the individual homeowner.
Improvements that pay off (or not) depend on the same three factors that affect home prices: location, location, location.
Agents should drill down to regional or city numbers in this study to find more applicable ROI numbers.
“There’s variation by projects and variations by the cities,” Webb explained. “Sometimes it’s labor and sometimes it’s the perception of Realtors.”
That being said, there are some interesting national trends that may impact homeowners locally. Note that these projects are broken down into mid-range and upscale categories to account for building materials and finishes.
Subtle changes pay off
The No. 1 trend in this year’s numbers is that the subtle changes make for the biggest return on investment.
Remodeling compared these minor improvements to painting with “greige” — the popular mix of gray and beige that’s a subtle but wildly popular color this year.
The two highest percentage returns nationally came from low-ticket improvements under $2,000: attic insulation came in no. 1 at 107.7 percent, followed by entry door replacement (steel) at 90.7 percent.
Read more here.
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