2018 Cost vs Value Home Renovation Report
Every year, Remodeling Magazine releases a report on the cost of home renovations compared to the increase in sales price that those renovations garnered. It does this by comparing the average costs of 21 common remodeling projects to the value that those projects held at the time of sale. The projects are divided into two categories of either “upscale” or “midrange”. No cities in Loudoun County, Fairfax County, or Arlington County are included in the study, but we can take a look at the regional averages to get a sense of what renovations buyers tend to value most.
Curb appeal and back-yard projects took the crown for the highest return on investment with exterior renovations taking the top 4 spots for highest ROI.
Garage Door Replacement- upscale (95% ROI)
Average Cost: $3,427
Average Resale Value: $3,262
Manufactured Stone Veneer- midrange (92.8% ROI)
Average Cost: $8,131
Average Resale Value: $7,546
Deck Addition (Wood)- midrange (88.4% ROI)
Average Cost: $10,030
Average Resale Value: $8,875
Siding Replacement- midrange (82.2% ROI)
Average Cost: $14,224
Average Resale Value: $11,735
When reviewing the report, there are a few things to keep in mind. Remember that these numbers are averages taken from an entire region (not just Loudoun, Fairfax, and Arlington Counties). The cost of upgrades/renovations can vary greatly depending on the price of labor and materials. The resale value of certain renovations can also be quite different from neighborhood to neighborhood. What buyers consider an important renovation (and therefore worthy of a higher price point) for a luxury home in Great Falls is quite different from what first time homebuyers in Sterling or Ashburn are looking for.
Another interesting item that we noticed in the report is that projects categorized as mid-range generally had a higher return on investment than those categorized as upscale. For example, a mid-range major kitchen remodel averaged a 60.5% ROI while an upscale major kitchen remodel dropped to 56% ROI. Making the right choices while being mindful of a budget is key for ROI. Just because you spend more, doesn’t always mean you will make more.
One last thing to keep in mind is the value of your own personal enjoyment of a renovation while you are living in your home. For example, an upscale master suite addition scored the lowest average return on investment. However, if adding a luxury master retreat to your home will make you love your home even more and you don’t plan on moving for the next few years, then the cost may be worth it for you.
If return on investment is of top priority for you, let us know! We would be happy to discuss which renovations buyers are currently valuing the most in your specific neighborhood and give you some guidance on how to make the biggest impact while keeping budget in mind. Sometimes just a little sprucing up can make all the difference!
© 2018 Hanley Wood Media Inc. Complete data from the Remodeling 2018 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.