With Seattle home prices surging, it’s increasingly difficult for buyers to afford their first home. Move-up buyers are rethinking the purchase of a bigger home — with a bigger mortgage. Many Seattle homeowners are taking a closer look at staying put and remodeling their present home to suit their future needs.
In the 2016 Remodeling Cost vs. Value Report, there is new data that shows there’s been a gain in the value of remodeling projects. The Cost vs. Value data is collected from 100 metropolitan markets nationwide. The 30 projects in the 2016 report returned an average of 64.4 percent on the cost of the remodeling — that’s up from 62 percent in 2015. (Seattle’s ratio of return on investment is much higher — see below.)
New for 2016, the latest Cost vs. Value Report eliminates eight projects from last year — the result of weak returns, which indicates those projects are less popular at time of resale.
In the latest report, the cost of all remodeling projects increased almost 5 percent over 2015. However, real estate professionals estimate the average remodel project’s return on investment (ROI) is approximately 7 percent higher than 2015. So remodeling projects continue to deliver good bang-for-the-buck.
Top projects
Topping the list of projects is new attic insulation. Adding new insulation returned 150 percent on the cost of the project.
Second is replacing your garage door; a new garage door returned 136.9 percent on the cost of the project.
Third on the list is replacing the front-entry door — that delivered a return of 127 percent.
Fourth on the list is a new wood deck, which recouped 106.9 percent on the cost (a composite deck recovered only 90 percent of the project cost).
Fifth on the list is a minor kitchen remodel, with an average return of slightly more than 104 percent on the cost of the project.
Finishing in the top 10 is a basement remodel, which returned almost 95 percent of the project’s cost.
Adding a family room returned 90 percent of the project cost, and a bathroom remodel returned 88 percent of the total project cost.
On this year’s list, 12 of the 15 highest-scoring projects were for work done on the exterior of the home. This supports the sage advice of generations of Realtors who tout the importance of curb appeal: Improve the exterior appearance of your house, especially front-yard landscaping, and you’ll capture the imagination of buyers before they’ve crossed the threshold.
It pays to remodel
As in past Cost vs. Value Report, Seattle ranks among the highest ROI in the nation. In Seattle, the average ROI is 98 percent. Once again, the Pacific region (encompassing California, Oregon and Washington, plus Alaska and Hawaii) had, by far, the highest cost-value ratio, at 77.5 percent. (In San Francisco, every remodeling project returns more than 100 percent on the investment.) Nationwide, the average ROI is 75 percent.
According to the National Association of Home Builders, roughly 60 percent of homeowners launch a remodeling project within six months of moving in. As a general rule, the simpler and lower-cost the project, the bigger its cost-value ratio.
Four of the five projects that cost less than $5,000 for a professional to do were ranked in the top five for cost-recouped.
With a 98 percent ROI, it pays to remodel your Seattle home. For inspiration, you can tune in your favorite television remodeling show, visit remodeling websites and sign up for a free how-to class at your local big-box home-supply store.
My favorite source for remodeling ideas is touring open houses: It’s free, and you’ll find a wide variety of project ideas.
To read the full 2016 Cost vs. Value report, go to www.costvsvalue.com.
For tips and resources on remodeling, visit the National Association of Home Builders website: www.nahb.org/en/consumers/homeownership/remodeling-your-home/finding-design-ideas-for-your-remodeling-project.aspx.
RAY AKERS is a licensed Realtor for Lake & Co. Real Estate in Seattle. Send your questions to ray@akerscargill.com or call (206) 722-4444.