In home remodeling, the cost-value ratio expresses the relationship between the cost of a home upgrade and the estimated dollar amount it contributes to the home’s resale value. Average cost-values are collected annually on 35 popular remodeling projects and replacements in more than 100 markets across the country. These numbers are a revealing metric that illustrate both consumer trends in home improvements and how these projects impact property value.
For the second year in a row, cost-value ratios have increased for all remodeling and improvement projects included in the survey. These results sustain a reversal of the downward trend that began in 2006. The overall cost-value ratio has recovered to 66.1 percent—a healthy increase of 5 percentage points over last year and more evidence that the recovery is stimulating consumers to consider home improvements that not only enhance quality of life in the short term, but have measurable dollar impact on resale value in the future.
What do the figures say about the choices U.S. homeowners are making? In current stats, replacements topped comprehensive remodels. However, these replacements tended toward bigger-ticket projects. Residents are receptive to multiple component upgrades such as entry doors and windows—practical improvements that impact energy conservation and security as well as aesthetics—in addition to replacing aging siding and roofing. These are high ROI projects in all markets—good news for both contractor and homeowner.
Other examples of top 10 replacements include garage doors, adding an outdoor deck and minor kitchen revamps. Though remodels lagged replacements, some notable and telling exceptions appear in the national statistics. Converting an attic to a spare bedroom and remodeling a basement both scored in the top 10 of popular remodeling projects with high ROI.
Clearly, the market thaw confirmed by the latest data on popular remodeling projects is gradually spreading throughout the industry. Construction Monitor empowers remodeling companies to benefit from this positive trend by providing nationwide building permit statistics to target marketing effectively and generate sales leads.
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