With the many different projects reported annually in Remodeling Magazine’s Cost vs. Value Report, not much has changed from last year…and that’s not a bad thing. The 29 projects found on this year’s report paid back an average of 64.3 cents on the dollar in resale value. Looking at the 24 most tracked projects (projects consistently tracked for the last six years), their payback for 2017 was also 64.3 cents—only three-quarters of a penny higher than 2016 projections.
Why the little change? Simply put: the differences in underlying numbers were minimal year-to-year. The average cost for those 24 projects rose a meager 3 percent, while the value that real estate professionals put on said projects only rose 4.2 percent. Minor gains, yes, but we’ll take what we can get.
Recent and long-time trends continued, reports Remodeling. Curb appeal projects like changes to doors, windows and siding garnered a higher ROI than work done inside the home. Replacement projects, like doors or windows, scored higher among real estate pros than did remodels.
On a national scale, the top five projects with the greatest ROI in the report’s “midrange” cost category are:
- Attic Insulation (Fiberglass)(107.7% ROI)
Average Cost: $1,343
Average Resale Value: $1,446
- Entry Door Replacement (Steel)(90.7% ROI)
Average Cost: $1,413
Average Resale Value: $1,282
- Manufactured Stone Veneer(89.4% ROI)
Average Cost: $7,851
Average Resale Value: $7,019
- Minor Kitchen Remodel(80.2% ROI)
Average Cost: $20,830
Average Resale Value: $16,699
- Garage Door Replacement(76.9% ROI)
Average Cost: $1,749
Average Resale Value: $1,345
The top five projects with the greatest ROI in the report’s “upscale” cost category are:
- Garage Door Replacement(85.0% ROI)
Average Cost: $3,304
Average Resale Value: $2,810
- Entry Door Replacement (Fiberglass)(77.8% ROI)
Average Cost: $3,276
Average Resale Value: $2,550
- Window Replacement (Vinyl)(73.9% ROI)
Average Cost: $15,282
Average Resale Value: $11,286
- Window Replacement (Wood)(73.0% ROI)
Average Cost: $18,759
Average Resale Value: $13,691
- Grand Entrance (Fiberglass)(70.1% ROI)
Average Cost: $8,358
Average Resale Value: $5,855
Regionally, the Pacific division (California, Oregon, Washington, Alaska and Hawaii) saw an average payback of 78.2 percent for all projects, with 10 projects posting cost-recouped levels of at least 90 percent. The East North Central states of Ohio, Indiana, Michigan, Illinois and Wisconsin, however, saw an average of just 54.9 percent, with no single project offering a payback of as much as 80 cents on the dollar.
At the other end of the spectrum are projects with the lowest returns on investment—improvements generally not in demand by the market. Again on a national scale, the five projects with the lowest ROI in the “midrange” cost category are:
- Bathroom Remodel(64.8% ROI)
Average Cost: $18,546
Average Resale Value: $12,024
- Master Suite Addition(64.8% ROI)
Average Cost: $119,533
Average Resale Value: $77,506
- Backyard Patio(54.9% ROI)
Average Cost: $51,985
Average Resale Value: $28,546
- Backup Power Generator(54.0% ROI)
Average Cost: $12,860
Average Resale Value: $6,940
- Bathroom Addition(53.9% ROI)
Average Cost: $43,232
Average Resale Value: $23,283
The five projects with the lowest ROI in the “upscale” cost category are:
- Major Kitchen Remodel(61.9% ROI)
Average Cost: $122,991
Average Resale Value: $76,149
- Master Suite Addition(59.9% ROI)
Average Cost: $250,687
Average Resale Value: $150,140
- Bathroom Remodel(59.1% ROI)
Average Cost: $59,979
Average Resale Value: $35,456
- Bathroom Addition(57.1% ROI)
Average Cost: $81,515
Average Resale Value: $46,507
- Deck Addition (Composite)(56.4% ROI)
Average Cost: $39,339
Average Resale Value: $22,171
The 2017 Cost vs. Value Report compares, across 99 markets, the average cost of 29 popular remodeling projects with their average value at resale one year later. Average resale value is calculated based on estimates provided by real estate professionals. View the full report, including project descriptions and city-level data, here.
Nick Caruso is RISMedia’s senior editor. Email him your real estate news ideas at nick@rismedia.com.
This was originally published on RISMedia’s blog, Housecall. Visit the blog daily for housing and real estate tips and trends. Like Housecall on Facebook and follow @HousecallBlog on Twitter.
