Renovation Do’s & Don’ts

Always a popular topic, Zillow has recently released a report analyzing which renovations bring the most bang for the buck – and which don’t.

  • Number 1 on the list is improving curb appeal: paint inside and out, landscaping and yard care. Interestingly, the right color combination can mean up to an extra $6,000! Here’s a hint: avoid yellow; those homes tend to sell for $3,000 less than expected.
  • Upgrade the bathrooms – but not too much. Mid-range remodels can bring an increase of $1.71 for every $1.00 spent but be forewarned: upscale remodels only bring 87 cents on the dollar.
  • Install new windows – again mid-range remodels are cost-effective; high-end is not.

Zillow also advises not to bother with the kitchen as these remodels tend to bring the worst return on investment primarily because everyone seems to have a different opinion on what constitutes are great kitchen. Let the buyers do it themselves. Also, finsihing the basement – even with adding a bathroom – will only fetch 50 cents on the dollar.

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More Equity = More Remodeling

As more and more homeowners see their equity increasing, many are turning that money into remodeling. The Joint Center for Housing Studies of Harvard University said its Leading Indicator of Remodeling Activity projects that home remodeling spending will increase by 8.6 percent by the close off 2016 and continue to accelerate to 9.7 percent by the first quarter of 2017.

Analysts estimate that money for remodeling and repairs could climb as high as $325 billion by early 2017.

Bathroom and kitchen remodels remain the most common renovations but whole house remodels and smaller scale additions are gaining traction as homeowners look to add space.

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Remodels Surpass Pre-Crisis Levels

Recently we reported that home remodels are on the rise again. The Urban Economics Lab Index, a new index jointly produced by BuildZoom and the MIT Center for Real Estate is now say ing that not only has the remodeling of existing homes rebounded, it has surpassed pre-crisis levels with residential remodeling now accounting for $300 billion a year in business.

This extensive remodeling is a strong indicator of consumer confidence, yet is consistently overlooked in the emphasis on new construction.

According to the Index, new-home construction remains nearly 61 percent below its 2005 pre-crisis level while remodeling of existing homes has not only fully recovered, it has climbed 3.4 percent above its 2005 level

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Remodels Resurface

The Urban Economics Lab Index is reporting that remodeling of existing homes has not only bounced back but has exceeded pre-housing crisis levels. Currently the residential remodeling business is estimated to exceed $300 billion per year.

New home construction remains nearly 61 percent below its 2005 pre-crisis level while remodeling of existing homes is now 3.4 percent above the 2005 level.

The rise in remodeling is generally seen by analysts as a positive indicator of consumer confidence, a more robust economy, and an belief in the value of real estate as a sound investment.

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