WHICH REMODELING PROJECTS PROVIDE THE HIGHEST RETURN IN 2014?

Which remodeling projects provide the highest return in 2014?  Every year about this time there is a report that comes out from "REMODELING" magazine that illustrates some of the most common remodeling projects and their relative return on investment.  This year there are 22 different projects that were rated on 'mid-range' homes and 13 more on 'upscale' homes.  The National results can be found here.  This is a "good news/bad news" report.  The good news is that the results all show positive growth over their return on investment (ROI) when compared to their ROI from last year's report.  The bad news is that there are none that yet yield a positive ROI based on a National average.  

What does that mean?  It means that just because you decide you want to make some improvements to get your home ready for sale, it doesn't necessarily mean that you will get all of the money that you invested back.  For example, the national report shows that a basement remodel that costs $62,834 averaged a $48,777 return or only a 77.6% return on investment.

The news does get better however when you go to the Regional Data for the Pacific Region.  The results of the Pacific Region's ROI have 7 of the 22 projects on 'mid-range' homes showing at least a break even proposition.  The results of the Pacific Region's report can be found here.  A new steel front door will yield a 113% ROI and a new wood deck will yield a 109% ROI.  Only one project was able to yield a positive ROI on the 'upscale' homes and it was a garage door replacement with a 104% ROI.  

On a more local level, the closest community to us here in the Matsu Valley is the city of Anchorage.  Surprisingly, even with the housing market having a pretty good year in Anchorage, the reports show that last year's returns were better than this year's report.  The Anchorage report can be found here.

They also have some informative videos this year to help illustrate the purposes of the report. 

It's always this time of year that we talk to prospective home sellers and they often tell us about all the projects that they have done over the last year...and how much more they expect to get as a result of them.  Unfortunately, we have to then show them that the $10,000 project that they took on might only get $8,000 back.  

That all said, if you are thinking of taking on a remodeling project with the plan of selling in the near future, we need to schedule a time to meet and discuss them to really determine if they are projects that need to be done...or projects that should be left for the new buyer.  

To find out what your home is worth in today's market you can fill out this short form on our website.  For other questions on the state of the real estate market in the Matsu Valley, visit our website at www.AlaskaHomeSellers.com or call our office at (907)352-1828 to discuss your remodeling project plans to determine if they are right for you.  

Have a great weekend!  

Greg
 
© 2014 Hanley Wood, LLC. Complete data from the Remodeling 2014 Cost vs. Value Report can be downloaded free at www.costvsvalue.com.