Cost vs. Value: The Home Improvement Projects With the Highest ROI in 2018

Reprinted from RIS Media’s Housecall

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A strong housing market isn’t necessarily all good news for sellers. As evidenced by Remodeling magazine’s newly-released Cost vs. Value Report for 2018, average return on investment (ROI) for home improvement projects dipped across the board, with “upscale” projects taking the biggest hit.

The report, which measures the average cost of 21 popular remodeling projects and their average resale value one year later, found that garage door replacement has the highest ROI at 98.3 percent (up from 85 percent year-over-year). Backyard patio jobs garner the lowest ROI, at 47.6 percent (down from 54.9 percent year-over-year).

The reason for the sweeping decrease in ROI isn’t immediately obvious, but Remodeling magazine’s editor-in-chief (and manager of the report) Craig Webb notes that it’s likely related to the strength of the housing market currently.

“It’s not clear if…nationwide affordability concerns are leading (real estate) pros to question the value of renovations that would make a house even more expensive at resale,” says Webb.

However, a silver lining from the report relates to when the data was compiled. Remodeling magazine put all the cost information together before the country was struck with several natural disasters, including massive forest fires and several hurricanes. Since then, building supplies and the price of skilled labor has increased, but that’s expected to change over the course of 2018. As a result, expect to see the ROI of most of these projects level out by the end of the year.

Despite these events, some longtime trends continued through the new year. Remodeling is still far more cost-effective than replacement, but, according to real estate pros, replacing is still the way to go. This year, there’s a 20-point difference in ROI: 76.1 percent for replacement jobs, versus 56 percent for remodeling.

Nationally, when it comes to renovation ROI, curb appeal still wins out. Here are the top five projects with the greatest ROI in the report’s “midrange” cost category:

Manufactured Stone Veneer (97.1% ROI)

  • Average Cost: $8,221
  • Average Resale Value: $7,986

Entry Door Replacement (Steel) (91.3% ROI)

  • Average Cost: $1,471
  • Average Resale Value: $1,344

Deck Addition (Wood) (82.8% ROI)

  • Average Cost: $10,950
  • Average Resale Value: $9,065

Minor Kitchen Remodel (81.1% ROI)

  • Average Cost: $21,198
  • Average Resale Value: $17,193

Siding Replacement (76.7% ROI)

  • Average Cost: $15,072
  • Average Resale Value: $11,554

The top five projects with the greatest ROI in the report’s “upscale” cost category are:

Garage Door Replacement (98.3% ROI)

  • Average Cost: $3,470
  • Average Resale Value: $3,411

Window Replacement (Vinyl) (74.3% ROI)

  • Average Cost: $15,955
  • Average Resale Value: $11,855

Window Replacement (Wood) (69.5% ROI)

  • Average Cost: $19,391
  • Average Resale Value: $13,468

Grand Entrance (Fiberglass) (67.6% ROI)

  • Average Cost: $8,591
  • Average Resale Value: $5,809

Bathroom Remodel (56.2% ROI)

  • Average Cost: $61,662
  • Average Resale Value: $34,633

Nationally—and on the complete other end of the spectrum—here are the five projects with the lowest ROI in the “midrange” cost category:

Backyard Patio (47.6% ROI)

  • Average Cost: $54,130
  • Average Resale Value: $25,769

Master Suite Addition (56.6% ROI)

  • Average Cost: $123,420
  • Average Resale Value: $69,807

Major Kitchen Remodel (59% ROI)

  • Average Cost: $63,829
  • Average Resale Value: $37,637

Bathroom Addition (59.9% ROI)

  • Average Cost: $44,717
  • Average Resale Value: $26,769

Deck Addition (Composite) (63.6% ROI)

  • Average Cost: $17,668
  • Average Resale Value: $11,239

The five projects with the lowest ROI in the “upscale” cost category are:

Master Suite Addition (48.3% ROI)

  • Average Cost: $256,229
  • Average Resale Value: $123,797

Major Kitchen Remodel (53.5% ROI)

  • Average Cost: $125,721
  • Average Resale Value: $67,212

Bathroom Addition (54.6% ROI)

  • Average Cost: $83,869
  • Average Resale Value: $45,752

Bathroom Remodel (56.2% ROI)

  • Average Cost: $61,662
  • Average Resale Value: $34,633

Grand Entrance (Fiberglass) (67.6% ROI)

  • Average Cost: $8,591
  • Average Resale Value: $5,809

The 2018 Cost vs. Value Report compares, across 149 markets, the average cost of 21 popular remodeling projects with their average value at resale one year later. Average resale value is calculated based on estimates provided by real estate professionals. View the full report, including project descriptions and city-level data, here.

About marilynsellshollisterrealestate

I am a native Californian born in Los Angeles and have resided in San Benito County since January 30, 1959. I attended the University of Southern California. I am a licensed Real Estate Broker, license #00409787, active for almost 45 years. I started my career in 1972 and still am totally committed to the highest level of service to my clients. I am currently associated with Intero Real Estate Services. I am Past President of the San Benito Association of Realtors, serving in the role on numerous occasions. I was a Director of the California Association of Realtors for over 18 years, having served on numerous committees. I also served 2 terms representing the California Association of Realtors at the National level, NAR. I am a certified SRES (Senior Real Estate specialist), since 2005. My community involvement has included membership in the Hollister Rotary Club, serving as their first woman President in 2002. In the late 1960's, I became a member of the El Torillo Chapter of Children's Home Society, and served as President, and was also President of the Tri-County Council of CHS, which is today Kinship Center, and I am currently a Senior Active. I am a member of the San Benito Chamber of Commerce. From 2002-2008, I served on the Board of the Hollister Downtown Association and was their President from 2006-2007, and still serve on sub-committees of this organization. And, I am currently serving my 3rd term on the Community Foundation. My record of performance and my reputation have made me who I am in the industry. I am a household name in San Benito County, when you think of Real Estate. My name is recognized not only in Hollister, but in our neighboring counties, Monterey, Santa Cruz and Santa Clara counties. I have been involved in land development, marketed several subdivisions, sold ranches, commercial leasing, bank-owned properties, short sales and own a Property Management Company, Hollister Rental Properties, for more than 35 years. I am proud of my sales record and for the majority of my career I have been in the top 1% of major Real Estate Companies including Van Vleck Realtors, Cornish and Carey, Contempo, Seville-Contempo, Century 21, Coldwell Banker and finally Intero Real Estate services for the last 15 years. Using my skills in negotiating, mediation and transaction closure, during 2010 and 2011, I was involved with the City of Hollister's First Time Home Buyer Down Payment Assistance Program. The program was the City's Redevelopment Agency, under Bill Avera, with the assistance of CJ Valenzuela who was working with the County of San Benito. CHISPA, a non-profit, was responsible for restoring homes to equal to new condition that the City had taken back in foreclosure, or that they had acquired. When the homes were restored, we put them on the Multiple Listing Service and we went out and promoted the City's Down Payment Assistance Program. Buyers were screened and qualified by our preferred lenders. I facilitated workshops for First Time Buyers explaining the programs. I negotiated the contracts for the City of Hollister and with the Buyers. With this program, I closed 2 homes in 2010, and 4 homes in 2011. On a personal note, I am married to Richard Ferreira, a retired General Contractor/Developer. We have a combined family of six daughters, six grandsons and 3 granddaughters. We share commons interests in travel, movies, entertaining, and Richard has picked up my love of cooking. Our spare time is spent with family and enjoying our grandchildren.
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