Despite the recent slide in home values across the country, remodeling projects continue to be considered among the safest places to invest during these uncertain economic times. Statistics from the National Association of Realtors show the while home prices have fallen an average of 7% nationally, the value of investment in home remodeling projects has declined only 3.86% according to Remodeling Magazine’s 2008-2009 Cost vs. Value Report.
Cost versus value studies are created annually to review all types of remodeling projects and identify those that offer the most return on investment. In recent years, the top three projects that offer the highest returns have remained the same.
At the top of the list is replacing siding on the home with one of the many upscale fiber cement products on the market. The second best home improvement investment is the installation of a midrange wood deck. The third highest return is a midrange siding replacement project with a vinyl siding product. Fourth on the list is siding replacement using the upscale foam-backed vinyl. And rounding out the list at number five is a midrange minor kitchen remodel.
What is the common theme amongst the first four projects on the “best investment” list? If your project adds curb appeal, it will always result in high returns.
Dig a bit deeper into the list and you will find the next category of projects that yield the highest returns focus on window replacements of various types. Why? Like siding, these are often projects of necessity. Also, consumers have a much greater awareness of energy efficiency and with the rising cost of energy, homeowners are aware that window projects are often essential to controlling energy costs.
Not surprisingly, when it comes to traditional remodeling projects, kitchens and baths are the smartest place to spend your money. This is where the consumers still expect the money to be spent when looking for a home. In fact, kitchens are the only interior project type to be found in the top ten remodeling returns on investment.
The message to consumers – putting money into your home is still a very good investment – just be wise with your selections to ensure you do not turn off potential buyers and remember that projects focusing on curb appeal currently result in your best investment.
Geoff Horen is President of The Indianapolis Remodelors Council and the Chief Executive Officer of The Lifestyle Group, an award-winning residential remodeling company that services Central Indiana homeowners. He can be contacted at 317-352-9022 or Geoff@lifestylegroup.com.
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