Just as they have almost every year, Realtors ranked exterior remodeling projects as the most valuable home improvement projects in the 2019 Remodeling Cost vs. Value Report. The report compares changes in home improvement project costs with Realtors' perceptions of what those projects contribute to a home's price at resale.
"When buyers are looking for their dream home that first impression really counts. Curb appeal, which is what is seen from the street, greatly influences prospective buyers. It can make a difference in the desirability and feel of a home. It is also a deciding factor on whether or not a homebuyer will consider further viewing of a home for sale," said Alan Barbic, president of the Silicon Valley Association of Realtors.
This year's report, which surveyed more than 3,200 real estate professionals about returns for 22 projects in 136 U.S. markets, found nine out of 10 curb appeal projects had the highest return value, with a new garage door at the top of the list, receiving a 97.5 percent return on investment (ROI). Manufactured stone veneer ranked next, recouping 94.9 percent. A wood deck addition and siding replacement are each expected to have an estimated 75.6 percent ROI and a steel entry door replacement, has an ROI of 74.9 percent.
Homeowners interested in improving their kitchen will be pleased to learn that a mid-range minor kitchen remodel, which would typically have a new laminate countertop and new energy-efficient appliances, was one indoor project that ranked third in remodeling projects with the highest return value, recouping 80.5 percent.
Costs of return vary from region to region, depending on the weather, the cost of materials, and lifestyle. In the San Jose area, Realtors surveyed ranked manufactured stone veneer as having the highest rate of return - 131.4 percent, followed by a minor kitchen remodel, 90.4 percent; garage door replacement, 93.2 percent; window replacement (vinyl), 85 percent; and window replacement (wood) 81.6 percent.
This year's report indicates the remodeling industry has experienced a robust market, but the rising costs of materials are affecting rates of return. President Trump's new import tariffs on building materials like lumber and steel, are likely to have a significant impact in bringing down costs of return.
When considering improvements, the report suggests homeowners should think like a broker. "First impression impacts the value of a property when the resale value of a property is estimated," according to Barbic, who is an associate broker with Sereno Group in Los Gatos. "When potential buyers look at a home, the first thing they see is the outside. If the home appears well-kept and has an inviting, warm feeling from the start, they want to step inside the home and see more."
A garage door replacement is important today, says Barbic. "As a result of the Paradise and Camp fires, where some victims could not open their garage doors manually when the power went off, a new law, SB 969, requires automatic garage doors installed after July 1, 2019 to have a battery backup for safety purposes."
When making improvements, Barbic advises homeowners to consult a professional Realtor and get their insight. "Realtors see so many homes each year and are in a position to know which improvements buyers seek. Due to the high price of homes, most buyers expect a home to be move-in ready and curb appeal has significant present and future value to them."
Barbic also urges homeowners to stick to a budget. "Costs of remodeling can easily get out of hand. Once you've decided on your home improvement project, get bids from licensed contractors. Create a realistic budget on how much you can afford and make sure you stay within that budget."
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
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