Market Update May 18, 2022

How to read graphic: The median spend in 2021 on a kitchen remodel was $15,000, a 25% increase from 2020. One could infer costs have increased in 2022.

CONSIDERING SOME RENOVATION?

With building materials and labor prices climbing ever higher, you might be wondering just how much it would cost to update your home. Therefore, this week I’ll be reviewing the most popular spaces to remodel and their relative costs.

If you’ve been mulling over a remodel project, then you’re in luck! Below, I’ll be providing a short break down of the findings on a recent “home remodel” survey conducted by the National Association of Realtors (NAR) and National Association of The Remodeling Industry (NARI).

In this comprehensive survey, both cost and satisfaction (“joy score”) were measured and ranked. Before we get project specific, let’s take a look at why homeowners decided it was time to renovate and how they faired.

Reasons for a Remodel
When consumers remodel, it is to:

• Upgrade worn-out surfaces, finishes, and materials (30%);
• Add features and improve livability (20%);
• Change is needed (16%).

Remodel Satisfaction
Most consumers are pleased with the overall results:

• Would tackle the project the same way (57%);
• Would make a few different choices, such as finishes or materials (35%).

Was it worth it?
Owners who remodeled have expressed:

• Greater desire to be in their home (84%);
• Increased enjoyment in their home (69%);
• Satisfaction of the completed project (39%);
• Major sense of accomplishment (69%).

….let’s look at the cost and satisfaction results.

INTERIOR PROJECTS
Hardwood Floor Refinishing
Cost Estimate: $3,400
Recovered Cost Estimate:$5,000
ROI: 147%
Joy Score: 10

New Wood Flooring
Cost Estimate: $5,500
Recovered Cost Estimate:$6,500
ROI: 118%
Joy Score: 10

Insulation Upgrade
Cost Estimate: $2,500
Recovered Cost Estimate:$2,500
ROI: 100%
Joy Score: 10

Basement to Living Area
Cost Estimate: $57,500
Recovered Cost Estimate:$49,250
ROI: 86%
Joy Score: 9.7

Closet Renovation
Cost Estimate: $6,000
Recovered Cost Estimate:$5,000
ROI: 83%
Joy Score: 10

New Primary Bedroom Suite
Cost Estimate: $172,500
Recovered Cost Estimate:$100,000
ROI: 56%
Joy Score: 9.5

Attic Conversion to Living Area
Cost Estimate: $100,000
Recovered Cost Estimate:$75,000
ROI: 75%
Joy Score: 10

Complete Kitchen Renovation
Cost Estimate: $80,000
Recovered Cost Estimate:$60,000
ROI: 75%
Joy Score: 9.8

Bathroom Renovation
Cost Estimate: $35,000
Recovered Cost Estimate:$25,000
ROI: 71%
Joy Score: 9.6

Kitchen Upgrade
Cost Estimate: $45,000
Recovered Cost Estimate:$30,000
ROI: 67%
Joy Score: 9.8

Add New Bathroom
Cost Estimate: $80,000
Recovered Cost Estimate:$50,000
ROI: 63%
Joy Score: 8.2

New Home Office
Cost Estimate: N/A
Recovered Cost Estimate:N/A
ROI: N/A
Joy Score: 10

EXTERIOR PROJECTS
New Roofing
Cost Estimate: $12,000
Recovered Cost Estimate:$12,000
ROI: 100%
Joy Score: 9.2

Garage Door
Cost Estimate: $2,000
Recovered Cost Estimate:$2,000
ROI: 100%
Joy Score: 9.0

New Siding – Vinyl
Cost Estimate: $18,300
Recovered Cost Estimate:$15,000
ROI: 82%
Joy Score: 7.9

New Siding – Fiber Cement
Cost Estimate: $18,600
Recovered Cost Estimate:$16,000
ROI: 86%
Joy Score: 7.9

Paint Exterior Siding
Cost Estimate: N/A
Recovered Cost Estimate: N/A
ROI: N/A
Joy Score: 9.8

New Windows – Vinyl
Cost Estimate: $30,000
Recovered Cost Estimate:$20,000
ROI: 67%
Joy Score: 9.6

New Windows – Wood
Cost Estimate: $48,000
Recovered Cost Estimate:$30,000
ROI: 63%
Joy Score: 9.6

New Front Door – Steel
Cost Estimate: $3,150
Recovered Cost Estimate:$2,000
ROI: 63%
Joy Score: 9.5

New Front Door – Fiberglass
Cost Estimate: $3,500
Recovered Cost Estimate:$2,100
ROI: 60%
Joy Score: 9.5

The bottom line:
Judging by the overall Joy Scores, most projects were worthwhile after all. New siding and additional bathroom came in with the lowest scores. Additional livable square footage, increased thermal comfort and flooring ranked highest.

The best investment projects to consider when listing a home for sale are:

• New Roofing (ROI 100%);
• Garage Door (ROI 100%);
• Hardwood Floor Refinishing (ROI 147%);
• New Wood Flooring (ROI 118%);
• *DIY paint projects (ROI varies).

I would consider the remaining renovations as purely lifestyle and satisfaction investments. Therefore, any major renovations should take place well before you start thinking about selling. After all, you want to be able to enjoy the renovation to get your money’s worth.

*Cautionary Comment: Be careful with painting, because poor prep work and execution can actually detract from your home’s value.