Homeowners are ready to make 2012 a banner year for remodeling and the latest cost-for-value research suggests that getting the most bang for every buck is more important than ever.
The Remodeling Market Index (RMI) hit a five-year high at the end of 2011, indicating that residential remodeling should continue to grow in 2012, according to panelists at a press conference at NAHB’s International Builders’ Show. After a slow start, home improvement spending is expected to trend up later this year, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. If this momentum continues to build during the second half of the year, remodeling activity is on course to end 2012 on a positive note.
However, consumers want to get the most for their money. A recent survey by Better Homes and Gardens released last week at the Home Builders Show found that consumers find it more important than ever to get the most value out of every dollar (61 percent in 2011, up from 56 percent in 2010), and will spend more time looking for bargains and deals in order to get the most value for their money (Up to 54 percent in 2011, from 52 percent in 2010).
Living space and the way it’s utilized also continues to be top of mind for consumers. In this latest survey, conducted in December 2011, consumers wished for a median square footage of 1,791 sq. feet, down from 1,846 sq. feet the year prior. There’s more attention given towards the aesthetic and function of a space, rather than the amount of space. They’re not as willing to invest in the bigger, but instead investing in what’s better. Affordability and efficiency – both in space and energy – rank topmost.
In terms of remodeling priorities for consumers, baths are outpacing kitchens. Bathroom remodeling stayed constant in 2011 and 2010 (31 percent) and kitchen remodeling was stable at 25 percent in 2011, compared to 24 percent in 2010.
Remodeling Magazine’s annual Cost vs. Value report for 2011-2012 found that the trend right now is replacement over remodeling-swapping out the old for the new rather than doing a total gut job, which can be much more costly. Exterior replacement projects-such as new garage doors and a new entry door-offer some of the best returns at resale, allowing home owners to recoup close to 70 percent or more of the costs of the project at times of resale.
The following are the top, mid-range projects from this year’s report, based on what home owners stand to recoup at time of resale:
1. Replacing the entry door to steel
Estimated cost: $1,238
Cost recouped at resale: 73 percent
2. Attic bedroom (converting unfinished attic space into a bedroom with bathroom and shower)
Estimated cost: $50,148
Cost recouped at resale: 72.5 percent
3. Minor kitchen remodel (including new cabinets and drawers, countertops, hardware, and appliances)
Estimated cost: $19,588
Cost recouped at resale: 72.1 percent
4. Garage door replacement
Estimated cost: $1,512
Cost recouped at resale: 71.9 percent
5. Deck addition (wood)
Estimated cost: $10,350
Cost recouped at resale: 70.1 percent
6. Siding replacement (vinyl)
Estimated cost: $11,729
Cost recouped at resale: 69.5 percent