The axiom, "Don't judge a book by its cover," is true in many cases but perhaps not for consumers who are in the market to buy a home. In fact, for the second year in a row, the 2008 Remodeling Cost vs. Value Report has found homeowners get the best return on investment through exterior remodeling projects, according to the Silicon Valley Association of REALTORS®.
With lots of competition in the market for buyers, a well-maintained "outside" can be just the thing to get home shoppers "inside"…for the long term.
"Today's buyers have much more inventory to choose from, so it's important for a home on the market to make a positive first impression," Leannah Hunt, president of the Silicon Valley Association of REALTORS® said.
According Hunt, who is a Realtor with Coldwell Banker in Palo Alto, Realtors understand what catches their buyer clients' eyes. The Cost vs. Value report revealed that wood deck additions and siding replacements returned more than 80 percent of their project costs upon resale. Upscale fiber cement siding recouped 86.7 percent of costs, followed by wood decks at 81.8 percent, midrange vinyl siding at 80.7 percent and upscale foam-backed vinyl siding at 80.4 percent.
While curb appeal is a top concern among buyers, once they cross over the threshold, window replacements and kitchen remodels also make a difference. Upscale and midrange wood and vinyl window replacements returned more than 76 percent of costs. Investing in a major midrange kitchen recouped 76 percent of costs, and a minor midrange kitchen remodel returned 79.5 percent.
"It's important to consult with Realtors in your area if you're looking to increase home value," Hunt said. "Realtors see hundreds of homes each year, and they can provide valuable insight into what improvements will entice buyers," she added.
While still a good investment, bathroom projects don't return as high a percentage of costs as in previous years. According to Realtors, midrange bathroom remodels were estimated to recoup 74.4 percent on resale.
The least profitable remodeling projects haven't changed since last year. These projects include home office remodels, which returned only 54.4 percent, sunroom additions, which returned only 56.6 percent and back-up power generators which returned 57.1 percent, Hunt explained.
The 2008 Remodeling Cost vs. Value Report compared construction costs with resale values for 30 midrange and upscale remodeling projects in 79 markets across the country, expanding from 60 markets last year. This is the 11th year that the report, which is produced by Hanley Wood, LLC, was completed in cooperation with REALTOR® Magazine, as Realtors® provided their insight into local markets and buyer home preferences.
"In a buyer's market, a well-maintained exterior can mean the difference between selling a home quickly for the list price and having a home that sits on the market for months and sells below the asking price," Hunt said. "Now more than ever, it's very important to put your home's best facade forward."
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.
For further information, please email or call the SILVAR office at (408) 200-0100.