Real Estate Week in Review
A new cost vs. value report from the Appraisal Institute, published in Remodeling magazine, analyzes which home remodeling projects offer the most return on investment at the time of sale. The Institute President Scott Robinson explains, “home improvement projects are not necessarily investments in which a homeowner should expect a dollar-for-dollar return, but rather projects that can increase the likelihood of a sale, or bring it to the same standards of other properties in a neighborhood. So keep in mind that certain projects might be essential to selling a your house, so the decision to execute might not be elective. For example, if the house doesn’t have a bathroom that functions, fix it.”
Can home improvement projects have a downside? Yes. “It’s entirely possible to over-improve your house by adding things that you might consider an amenity, but that won’t necessarily be valued by many buyers. That includes special-use spaces like saunas and wine rooms, and amenities like swimming pools and tennis courts.” Says Robinson, “Projects that take a home significantly beyond community norms are often not worth the cost when the owner sells the home. If the improvements don’t match what’s standard in a community, they’ll be considered excessive.”
Ultimately, “home buyers today have been spoiled by the images of perfectly repaired and perfectly curated that appear on social media and on television, creating high expectations for the condition, finishes and amenities of the houses they’re considering. Many buyers today are also busy and don’t have the time to tackle a fix-up project.”
So which projects have the highest return on investment in the Twin Cities area? Below are some highlights from the report:
- Manufactured Stone Veneer
Job Cost: $7,520
Resale Value: $7,295
Cost Recouped: 97%
- Fiberglass Attic Insulation
Job Cost: $1,351
Resale Value: $1,286
Cost Recouped: 95.3%
- Garage Door Replacement
Job Cost: $1,890 – $3,202
Resale Value: $1,484 – $2,510
Cost Recouped: 78.5%
See the entire list from the Star Tribune here.
Photo from 123rf.com
Home Sellers are Seeing the Strongest Appreciation Since the Recession
MarketWatch reports on new data from RealtyTrac that in March, US homeowners realized the highest price gains since December 2007. On average, homes sold for $30,500 more than purchase price, an average gain of 17%.
The Twin Cities is seeing a return to near pre-recession prices, as illustrated in the chart below.