Wednesday, April 23, 2014
By SUSAN STRAIGHT/Special to the Washington Post
Janet O'Grady recently had the front walkway and porch steps replaced on the rambler she's owned for 30 years in Arlington, Va. She also had her kitchen painted.
Now she's planning to upgrade her countertops to granite.
"Eventually, I'll sell, but I wanted to do the work when I could enjoy it," she said. "Now I've got this fabulous front walkway and it opens up the world," she added.
She's in good company.
As the housing market recovers, spending on remodeling is rising. Whether to increase resale value or to simply make their surroundings more contemporary, homeowners spent 9 percent more on renovations in 2012 than the previous year, according to an April study by the Joint Center for Housing Studies at Harvard University.
Renovation spending is expected to increase again this year, the study says.
The top improvements homeowners make, according to the latest American Housing Survey, are upgrading appliances and major equipment as well as flooring, paneling, ceilings, windows and doors. Garages, at a median price of $15,000, are the most expensive project. Kitchen remodeling, at a median price of $5,000, is the next most expensive one, followed by roofing, at a median cost of $4,559.
Growth in remodeling is fueled by several factors, experts say.
Rising home equity has given owners incentive to resume spending on improving their properties.
Underwater homeowners, who'd like to sell but can't, are instead upgrading. Many who aren't underwater, drawn by the sellers' market, are investing in renovations that can help them get top dollar once they list.
The investors and traditional buyers who've flooded the market recently are spending heavily to renovate their new properties.
And elderly people are putting money into wider doorways, ramps, elevators and easily accessible showers so that they can remain independent in their homes as they age.
Still, many homeowners who want to increase resale value when they list may feel clueless in determining what projects will yield the best return. Is it best to do a full-scale kitchen and bathroom remodel, or will some paint here and there do?
If you're looking for the greatest return on investment, start at your front door. According to Hanley Wood, a publishing and information firm that focuses on housing construction issues, a steel entry-door replacement job will cost an average of $1,207 in the Washington region, work that will yield about 98 percent in resale value.
Vinyl siding replacement averages about $12,007 and yields about an 84 percent return. And adding a wooden deck is also a good investment: Costing an average of $10,696, it returns about 91 percent at resale.
The projects that recover less are sunroom additions, 58 percent; bathroom additions, 53 percent; and home office remodels, 44 percent.
Such information may be useful to determine which option is best. For instance, homeowners who install steel entry doors may pay less and recoup more. A fiberglass door recoups 66 percent of its $3,481 cost, according to the Hanley Wood study, compared with the 98 percent recovery of the $1,207 cost for steel doors.
A major kitchen remodeling recoups 72.5 percent of its cost, compared with 85 percent for a minor one.
A wood deck addition recoups 91 percent of its $10,696 cost, compared with a composite deck, which returns 79 percent of its $15,701 cost.
The results reflect "what real estate agents are seeing," said Jonathan Smoke, chief economist for Hanley Wood.
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