Homeowners often make remodeling projects and home improvements with the thought of maintaining or increasing their home's value. Real estate trends of 2016 show that some projects increase the value more than others, while some projects recoup more of the job cost. The two do not go hand in hand, but the trend is an increase in overall value.

Remodeling magazine reports, "Bigger and more expensive projects, rising new-home prices, curb appeal, and energy efficiency all contributed to a slight gain in remodeling projects’ payback at resale". Their study shows that the average return of job cost is 64.4 percent if the home sells within a year. This is up from 62 percent in their 2015 report. Attic insulation was the big winner at 117 percent of job cost.

The study also found that smaller, lower-cost projects recouped job costs better than larger, more costly ones. Of those projects examined under $5,000, 4 out of 5 ranked in their top five for recovering job costs. Those projects costing more than $25,000 recovered between 50 and 60 percent,

The National Association of Realtor's Remodeling Impact Report takes a different approach to evaluating home improvements. They examined appeal to buyers and added value to a house at resale. So, while some projects recoup their job cost, others increase the overall sale price more. They surveyed thousands of homeowners, real estate agents, and remodeling professionals to discover a close link between buyer appeal and overall resale price. Kitchens, bathrooms, wood flooring, HVAC replacements and basement conversions were some of the top projects.

The expectation is for the return on remodeling and home improvement projects to continue to increase. Remodeling magazine is projecting 3.8 percent growth in 2017 and even greater going into 2018.  If oil prices or interest rates rise, this projection could change, which means making home improvements now a safer bet.

If you would like to talk more about the key real estate trends of 2016 remodeling project payback, or need more information, please contact us.