Home Improvements for the Summer Real Estate MarketPosted on May 01, 2018
Financial analysts point out sales are up at home improvement stores because of increased remodeling activity for the sizzling summer real estate market. When you buy a home, it's exciting to remodel the home so it matches your favorite Pinterest collections and wildest décor fantasies. But when it's time to sell, it matters more whether the home improvements you make will pay you back. Also, the changes need to appeal to potential buyers rather than your own personal preferences. According to an article by cnbc.com, spending on remodeling will likely hit $340 billion in 2018. The number represents a 7.5 percent increase compared to last year, reports the Harvard Joint Center for Housing Studies. Some of the home improvement dollars is likely funneled into rental homes and AirBnB projects. As home prices in Colorado continue to rise, experts anticipate a buying frenzy.
Looking at the remodeling costs vs value
Depending on your individual goals, some remodeling projects make more sense than others. If you just want to increase your home value, consider the ROI or return-on-investment. According to the Remodeling Cost vs Value survey for 2018, adding manufactured stone veneer provides a 97 percent return on the money. Other strong remodeling choices include a steel entry door replacement, wood deck addition, minor kitchen remodel and siding replacement. In keeping with the baby boomer aging trends, consider a universal design bathroom remodel if you are older. A roofing replacement gives you a 68 percent return on money, while a bathroom addition comes in at 59 percent, a master suite addition comes in at 56 percent and a backyard patio registers a 47 percent ROI.
Talking to a real estate agent first
Before making a decision to spend money on a remodeling project, talk to your real estate agent. A good agent will help you crunch the numbers. Find out how much you could list your home for with a new deck or roof. Depending on the particular community in which you live, some home improvements matter more than other. Also, it's critical to understand the typical buyer based on your community or subdivision. If few potential buyers could pay more for improvements, it's better to scale back on the upgrades or additions. In fact, cnbc.com reports many real estate pros feel nervous about the value of renovations. Also, new tax reform laws prevents homeowners from deducting as much as before.
Figuring out what's retro and what's a buyer turn off
Before ripping out unique features such as stained glass windows or retro appliances, talk to your real estate agent about what's trending. Some color schemes and outdated items represent major buyer turn offs. But there is also a market for retro décor. To keep it simple, figure that the payback is higher or about 75 percent when you replace garage windows and doors as opposed to random improvements. The average payback is just 56 percent of the cost of most remodels. In Colorado, people love to spend time outdoors. So, think about curb appeal as well as outdoor living space. If your existing home does not have a deck or patio, it's possible to add landscaping, water feature and a sitting area for greater appeal without a major financial investment. Avoid tacky lawn ornaments that detract from the natural landscape's beauty.
Trends for this year point to the major gains in certain home improvements including manufactured stone veneer installation, wood deck additions and garage door replacements. At Team Lassen, we give our clients a free market analysis while also making recommendations about how to get a home ready to list. Talk to us about marketing your Colorado home, please contact us.