Cost V.S Value For Remodeling New England Homes 2009
Every year Remodeling Magazine does a great report on what you can expect to see as a return on your investment for various projects around the home. The report does an analysis between a specific projects cost and what you can expect as the resale value or what you would re-coup when selling.
This year was no different as Remodeling Magazine sought out Realtors across 80 Metropolitan areas around the United States.
I was fortunate enough to be one of the Realtors interviewed for the article by Jim Corey. Here is an excerpt from the story which discusses how properties that are in turn-key condition fair much better in the current Real Estate environment.
"What is high up on that list is move-in condition. In a booming real estate market, marginal locations move because buyers are willing to invest the time and money into customizing. They think of the investment as part of the long-term cost of the transaction. In lean times, the opposite psychology holds sway. Marginally maintained houses get house Hunter's short shrift."
Bill Gassett ought to know. The Hopkinton, Massachusetts market where he has sold homes for 25 years hit its pricing peak in 2005 and is down about 25% since that time.
“The houses that get most significantly hurt by the market,” Gassett says, “are the ones that haven’t been cared for.”
You can see the full article at Curb Appeal is King. I would like to thank Jim Corey again for the opportunity to be interviewed as getting quoted in a National magazine is always nice:)
Topping the list in 2009's cost v.s value report were items that were most practical. Given the state of the economy people seemed to be more frugal with their money and invested in more of the necessities. Interestingly enough seven out of the top 10 value-yielding projects of the 33 projects ranked by Realtors in this year’s Cost vs. Value Report were exterior projects!
In the charts below you are going to see cost v.s value data for the New England region for both mid level and upscale projects. Some areas of the country will see a difference is in the value recouped for certain projects.
One of the biggest reasons for the popularity of exterior replacements is energy efficiency and tax credits! Introduced this year was the American Recovery and Reinvestment Act tax credit which is available for energy efficiency upgrades, including qualified roof and window replacements. That has helped boost homeowners including buyers and sellers awareness of such improvements.
You will notice below that none of the upscale projects for 2009 had a positive return v.s 2008.
Looking over the data it is safe to say that other than some of the exterior projects shown, kitchen and baths tend to be very good places to invest your money in a home. Just remember even in these high return places you will not be getting back a 100% or more return!
As a Realtor selling homes all over the Metrowest Massachusetts area for the past twenty four years it is amazing how often I meet sellers who believe there is a one for one return on every dollar they invest in their homes. Some even believe it is more.
The most common things I hear are "how can my home only be worth X when I just spent $60,000 on my new basement" or "I just added this swimming pool for $50,000 my home has to be worth more."
In these examples people believe you can just tack on the amount you spend to the existing value of your home. Well maybe in Florida if you invest $50,000 in a pool you will get it back completely. Here in Massachusetts you would be lucky to get a small percentage of it back.
One of the best ways to think about home improvements is not so much the exact dollar you will recoup but your own personal enjoyment from these items. When it comes time to sell, there are plenty of buyers that will appreciate the improvements you have made if they are tasteful and fit what the general population is looking for.
Now more than ever if you are going to be selling your home it makes sense to put money in places that are going to improve the general appearance of your property. Buyers are very unforgiving today and the homes that are in less than stellar condition are the ones that get punished the most.
If you are thinking of selling your home be sure to read the top ten mistakes to avoid when selling a Massachusetts home. The article gives pointers on such things as staging, taking care of necessary repairs, along with a host of other issues that you can prepare for.
*** According to the survey home owners recouped an average of 63.8 percent of their investment in 33 different home improvement projects, according to REALTORS® who responded to the survey. The expected cost recoup was generally down from previous years in line with the drop in home prices nationally. The return on home owners investment in remodeling projects has declined an average of 3.5 percentage points between 2008 and 2009. That’s down from the 2.7 point drop between 2007 and 2008 and much less than the 5.5 point drop between 2006 and 2007 and the 10.5 point drop from 2005 to 2006.
Click here to see Best remodeling projects cost v.s value 2008.
About the Author: The above Real Estate information on best remodeling projects cost V.S value for New England 2009 was provided by Bill Gassett, a Nationally recognized leader in his field. Bill can be reached via email at firstname.lastname@example.org or by phone at 508-435-5356.
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I service the following towns in Metrowest Massachusetts: Hopkinton, Milford, Upton, Southboro, Westboro, Ashland, Holliston, Mendon, Hopedale, Medway, Grafton, Northbridge, Uxbridge, Franklin, Douglas, and Framingham MA.
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