The annual Cost V.S Value report for home additions and remodeling projects has been released by Realtor Magazine for 2008. If you are thinking of adding an addition or renovating your home in Massachusetts this is an excellent guide that will at least give you a ballpark on what you can expect for a return on your investment.
"NATIONAL ASSOCIATION OF REALTORS® statistics show that home prices have fallen by an average of 7 percent nationally in the past year. But the value of home owners’ investment in remodeling projects has declined only 3.86 percent on average between 2007 and 2008, according to Remodeling’s 2008–2009 Cost vs. Value Report."
Remodeling produces the Cost vs. Value Report each year in cooperation with REALTOR® magazine. REALTORS® responding to a survey in midsummer said home owners could expect to recoup a national average of 67.3 percent of their investment in 30 different home improvement projects. At the height of the housing boom in 2005, home owners could expect to recoup a national average of 86.7 percent on projects.
Top 10 Project Paybacks
Once again, exterior remodeling projects lead the way for recovery on dollars spent in this year’s Cost vs. Value survey. When you compare the national averages, replacement projects that boost curb appeal—siding, windows, and decks—give you the greatest chance of recouping your money. Inside, only kitchen remodels can compare, at least on a national level.
1. Upscale fiber cement siding (86.7%)
2. Midrange wood deck (81.8%)
3. Midrange vinyl siding (80.7%)
4. Upscale foam-backed vinyl (80.4%)
5. Midrange minor kitchen remodel (79.5%)
6. Upscale vinyl window replacement (79.2%)
7. Midrange wood window replacement (77.7%)
8. Midrange vinyl window replacement (77.2%)
9. Upscale wood window replacement (76.5%)
10. Midrange major kitchen remodel (76.0%)
Over the many years that I have been selling homes in the Metrowest Massachusetts area it has struck me how often homeowners believe there is a 100% payback on the money they spend on their homes.
Some of 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 $45,000 my home has to be worth more."
It is quite common for folks to put there list of improvements together add it all up and expect that they can add that onto the value of their home. Many fail to recognize that it is very rare to get a one to one return on the dollar. The items mentioned in the Realtor Magazine report are the best improvements you can make dollar for dollar and none of them come close to a 100% return.
There are other improvements that I know from experience return very little money to a home seller. For example, if you are unfortunate enough to find yourself in a position where you have to replace your Title V Septic system in Massachusetts, you know you will be outlaying a hefty sum of money for a new one.
The typical septic system replacement can run anywhere from $10,000 to $50,000 or more! Well guess what you can be darn sure that if that happens, you will not be getting a buyer to pay you back for putting it in. Buyers just don't care...they expect the toilets to flush. You will be lucky is you get a buyer to give you 10% to 20% of the cost.
In fact this is one of the reasons I always tell my clients to get their Title V Septic inspection done early. A surprise like this is never fun!
Other projects like repaving the driveway or adding additional landscape usually do not offer a high return unless the prior condition was absolutely terrible and the homes price point really warrants it.
Sometimes making home improvements are more about your own personal enjoyment and use and not so much what you will recoup when it comes time to sell you home.
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. In fact when you are faced with a challenging Real Estate market, the homes that get punished the most are the ones that are in less than great shape. Home buyers today have too many options and don't have to settle.
In the article I wrote detailing the top ten mistakes to avoid when selling your Massachusetts home two of the items covered centered around staging properly and neglecting necessary repairs.
When selling your home sometimes even though you do not get a direct monetary benefit from an improvement you increase the saleability of your home which in the long run causes it to sell quicker. We all know that time equals money:)
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The above information on the best remodeling projects cost v.s. value for your home was provided by Bill Gassett, the team leader for the #4 RE/MAX Team in Massachusetts in 2007. Bill can be reached via email at email@example.com or by phone at 508-435-5356. Bill has helped people move in and out of many Metrowest towns for the last 22+ Years. Bill's office is conveniently located in the center of Hopkinton MA at 77 Main Street.
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Bill Gassett is a thirty-two year veteran to the real estate industry. He enjoys providing helpful information to buyers, sellers and fellow real estate agents to make sound decisions. His work has been featured on RIS Media, National Association of Realtors, Inman News, Placester, RESAAS, Credit Sesame and others.