In some hopeful news for both homeowners and construction companies alike, Remodeling Magazine recently published its annual report on the cost versus value ratio for replacement and remodeling projects across the U.S. In a positive sign for the remodeling industry, the 2013 national average cost-value ratio rose to 60.6 percent, ending a six-year decline.
The latest ratio represents a nearly three-point improvement over 2011-12, and is more than a half-point higher than the figure from two years ago. The Remodeling Magazine survey reveals that lower construction costs are the principal factor in the upturn, especially when measured against stabilizing house values (How good do those last three words sound, right?).
The further good news in the report is that cost-recouped percentages were up for all 35 replacement/remodel projects tracked in the survey. This marks a complete turnaround from the 2011–12 report, when percentages dropped in all but three projects — some precipitously. The biggest gainers this year were mostly replacement projects, which have always outperformed discretionary remodeling projects, more so in recent years as the economic recession brought price to the forefront for homeowners making remodeling decisions.
For those of us living in the Treasure Valley, Remodeling Magazine’s report not only breaks out the cost-value numbers regionally, but by metropolitan area as well, including Boise. Looking over the numbers for our market, you’ll find that the best return on your remodel dollar comes from “minor kitchen remodels” at 76.2 percent. The figures are revealing not only from the standpoint of giving you some idea of how much you might recapture from a home remodel project should you sell your home, but also for the insight they will give you into average remodel costs, and how our market compares to the rest of the country (hint: we’re looking pretty darned competitive, my friends).
So what does all this mean to our customers, you ask? As interesting as the numbers in this report may be, they don’t fundamentally change the math as we see it — which has more to do with the intrinsic value of having a place to live that better meets your lifestyle needs. That said, however, it’s nice to know that should you decide to sell a home you’ve improved through a professionally managed remodel project (no offense to the DIYers out there), your return on investment should be better than it has been in many a year. That certainly beats a poke in the eye with a sharp stick, which isn’t a bad metaphor for what our overall housing market has felt like until now.