Business
Remodeling’s Cost and Value on the Rise
Updated research from REALTORS and NARI offers new payback benchmarks for 12 interior and eight exterior remodels.
120940 authors Qr Staff | September 28, 2017
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VIEW GALLERY
National Association of REALTORS® Research Department
A new roof resulted in the highest value recovered of all 20 projects examined, registering 109 percent. The REALTORS estimated cost recovered increased to $8,150 in 2017, compared to $8,000 in 2015. It has a Joy Score of 9.2.
WASHINGTON, D.C.—Homeowners who take on remodeling projects gain not only equity and more resale value in their home, but they are also more likely to find satisfaction and enjoyment from their home, according to a new report from the National Association of Realtors (NAR) and with help from the National Association of the Remodeling Industry (NARI).
The 2017 Remodeling Impact Report— the second of its kind from NAR—surveyed Realtors, consumers who have completed remodeling projects and members of NARI.
The report reveals top remodeling projects, as well as the increased value, financially and emotionally, that 20 specific projects bring to homeowners once completed.
2017 Remodeling Impact Report Results
Remodeling Project
NARI Cost Median
NAR Value Median
NAR Percent of
Cost Median (C/B)
New Roofing
$7,500
$8,150
109%
Hardwood Flooring Refinish
$3,000
$3,000
100%
Insulation Upgrade
$2,100
$1,600
76%
New Wood Flooring
$5,500
$5,000
91%
New Garage Door
$2,300
$2,000
87%
New Vinyl Siding
$13,350
$10,000
75%
New Vinyl Windows
$18,975
$15,000
79%
New Fiber Cement Siding
$18,000
$15,000
83%
New Steel Front Door
$2,000
$1,500
75%
HVAC Replacement
$7,475
$5,000
67%
Basement Conversion
$40,000
$25,000
63%
Kitchen Upgrade
$35,000
$20,000
57%
Complete Kitchen Renovation
$65,000
$40,000
62%
Attic Conversion to Living Area
$75,000
$40,000
53%
New Fiberglass Front Door
$2,700
$1,800
67%
Bathroom Renovation
$30,000
$15,000
50%
New Wood Windows
$35,000
$20,000
57%
Closet Renovation
$3,750
$2,000
53%
New Master Suite
$125,000
$65,000
52%
Add New Bathroom
$59,000
$29,750
50%
After completing a remodeling project, 75 percent of owners have a greater desire to be in their home, 65 percent say they have increased enjoyment in their home, and 77 percent feel a major sense of accomplishment when thinking of their completed project. Fifty-six percent felt happy when they see their completed projects, and 39 percent say they feel satisfied.
“No matter the objectives, Realtors have unique and invaluable insights into how renovations and remodeling will bring the most benefit to homeowners,” says NAR President William E. Brown, a realtor from Alamo, California, and founder of Investment Properties. “They also understand that many of these projects are undertaken solely to get more enjoyment from spending time at home.”
Interior Projects
For owners looking to sell their home, complete kitchen renovations, kitchen upgrades, bathroom renovations and new wood flooring as the interior projects that most appeal to potential buyers. Interior projects that yield the largest financial return upon resale are hardwood floor refinishing (recovers 100 percent of project costs upon resale), new wood flooring (91 percent of costs recovered) and insulation upgrades (76 percent of costs recovered). Bathroom renovations and adding a new bathroom yielded the smallest financial return upon resale, recouping approximately 50 percent of project costs.
Exterior Projects
When it comes to exterior projects, new roofing will recover 109 percent of costs upon resale—more than any other project in the report. New roofing was also the exterior project that most appeals to buyers, followed by new vinyl windows, a new garage door and new vinyl siding.
When it comes to the enjoyment homeowners gain from these projects, several projects received a perfect “Joy Score” of 10; Joy Scores range from 1 and 10, and higher figures indicate greater joy from the project. Projects with a perfect Joy Score of 10 included both interior and exterior project of all price ranges, such as a new master/owner’s suite with an estimated cost of $125,000 for a full makeover and new steel front doors with an estimated cost of $2,000.
Many homeowners find the idea of attempting a remodeling project too overwhelming to take on. Thirty-five percent of homeowners in the U.S. said they would rather move than remodel their current home. Owners in urban areas are the least likely to take on a project, with only 52 percent saying they would be willing to remodel their home, compared to 55 percent in suburban areas and 70 percent for owners in rural areas.
“Even though a remodeling project may seem overwhelming at the onset, working with a qualified remodeler who has the required experience and training can make a big difference,” says NARI President Tom Miller, MCR, CKBR, and owner of Tom Miller Remodeling, Inc. in Portland, Oregon. “This year’s report confirms how remodeling can increase home value and day-to-day enjoyment. I can’t emphasize enough how important it is to work with a contractor you can trust who adheres to a strict code of ethics and can help define a realistic budget. Get the project done right with a NARI member contractor.”
A full analysis of the new NAR report will appear in the October issue of Qualified Remodeler magazine. |QR