2015 Remodeling Cost vs. Value Report: Less is MorePosted: February 10, 2015
Are you considering selling in 2015? It’s important to know which home improvement projects will bring you the most return on your investment. Visit the 2015 Cost vs Value Report (see Dallas specific info here) which compares the 36 most popular remodeling projects and the value those projects retain at resale. If you’re making updates or just thinking about selling, let’s talk about how it will affect the value of your home!
The Cost vs. Value report is an annual collaboration between Remodeling magazine and REALTOR® Magazine, which breaks down the estimated cost of various remodeling projects and the estimated return on investment for those projects by region and by city, as well as by midrange and upscale projects. In general, the 2015 report boasts that “less is more”. It’s the smaller improvements that will give you the most bang for your buck.
According to the January 2015 issue of REALTOR® Magazine:
As a general rule:
- Simpler, lower-cost projects tend to return greater value. The national average cost for a steel door replacement was $1,230, for example. That’s the least expensive project on the list, and it ranks highest on the payback scale, returning 101.8 percent nationally on average. In fact, in 43 of the 102 markets surveyed, REALTORS® said the new door would recoup more than 100 percent of its cost. Other projects expected to top 100 percent payback in multiple markets: the midrange garage door replacement, the upscale garage door replacement, the midrange wood window replacement, and the minor kitchen remodel. Notice a pattern? With the exception of the kitchen job, they’re all replacement projects. In general, replacements cost less and provide a bigger payback than remodels or additions.
- First impressions are important. The replacements that offer the greatest payback are the ones that are most obvious to buyers when they first view a house in person or online, such as new door or garage door. Siding replacement also provides great value at resale—particularly this year’s one new project, manufactured stone veneer, which is expected to recoup 92.2 percent of its cost nationally on average.
- Kitchens still offer the most remodeling bang for the buck. The only remodeling job breaking into the top 10 in terms of payback is the minor kitchen remodel with a national average cost of $19,226 and a national average payback of 79.3 percent.
Top 5 projects nationally in terms of cost recouped:
1. Entry door replacement (101.8%)
2. Manufactured stone veneer (92.2%)
3. Garage door replacement (88.5%)
4. Siding replacement, fiber cement (84.3%)
5. Garage door replacement (82.5%)
From the January 12, 2015 article in Remodeling magazine:
It’s no surprise that replacement jobs—such as door, window, and siding projects—generated a higher return than remodeling projects. That’s been the case since at least 2003. But the gap between the two categories widened by 3.8 percentage points this year even as both declined in value: Replacement projects showed an average return of 73.2% in this year’s report, just a smidgen below its 73.7% last year, while the cost-value ratio of remodeling projects sank to 60.8% in this year’s report from 65.1% last year.
When grouped by job type, siding jobs fared better than most, perhaps because of a rising perception nationwide of the value of curb appeal. Midrange vinyl siding replacement jobs were one of only five projects to rise in value, to 80.7% from 78.2%. A replacement job involving foam-backed siding slipped just half a point in value, to 77.6%, while the cost-value ratio for a fiber-cement replacement job dipped to 84.3% from 87.0%. Similarly, window jobs were no more than 2.1 points lower this year than in the 2014 report, and they ranked between ninth and 16th in overall payback.
In contrast, kitchen remodels declined as much as 6.6 percentage points, while the drop for bathroom additions and remodels was more modest, slipping 3.8 points or less.
As a general rule, the simpler and lower-cost the project, the bigger its cost-value ratio. Three of the four projects that cost less than $5,000 for a pro to do were ranked in the top five for cost recouped, and the other two were in the $5,000-to-$25,000 price range. No project costing more than $25,000 ranked better than 14th.