Cost Versus Value in Home Remodeling

Cost is how much you pay for something; value is how much you get back in relation to that cost. Smart homeowners try to get the most value for their investment in remodeling or replacement projects. And, despite the decline in home prices in many areas of the country, remodeling projects have continued to hold steady. Remodeling magazine’s annual report shows that maintenance-type projects and moderately priced home upgrades have continued to provide stable paybacks, even in a slower market.

Statistics from the National Association of Realtors® show that home prices have fallen by an average of 7 percent nationally in the past year. However, according to Remodeling’s 2008–2009 Cost vs. Value Report the value of investments in home remodeling projects declined only 3.86 percent between 2007 and 2008. If you are wondering where to use your money safely during these uncertain economic times, you can still confidently invest in your home.

Currently, one of the best cost versus value projects is replacement windows. Many homeowners are concerned about energy efficiency, and replacement windows are one of the best ways to make your home more efficient and cut down on overall energy costs. New windows contribute to curb appeal, and any project that improves the appearance of your house will hold its value.

Curb appeal can be greatly improved by changing the appearance of your home’s exterior; siding replacement is also at the top of the list. Fiber-cement siding cost versus value ranks slightly above vinyl siding in value, although it costs slightly more. Fiber-cement siding gives the homeowner the look of wood without its disadvantages. Plus, it is guaranteed for up to 50 years and is ideal for hot, humid climates.

Wooden decks complete the list of the top projects, although in some areas of the country the cost versus value is lower. Climates in areas like Florida, Texas, and New Mexico make outdoor construction projects more of a gamble, as oppressive summer heat drives people indoors. The demand for outdoor living and entertaining space in places like South Carolina, Georgia, and Massachusetts, however, is on the rise.

Kitchen and bath remodeling is a perennial top-ten in cost versus value projects, but homeowners must spend their money wisely. If a remodel strays too far from classic appeal, then potential home buyers may turn away.

The overall trend in cost versus value projects is focusing on smaller, cost-effective projects. This suggests a more discerning attitude in light of the financial downturn. A healthy dose of common sense is always beneficial when planning a project to make sure it is appropriate for the space and resources. Ask us about the cost versus value considerations for your project.

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