2016 looks to be a stronger year for home remodeling, buoyed by homeowners seeking immediate satisfaction as well as a return on investment down the road
By Erik J. Martin
Many homeowners don’t embark on a major home improvement project unless they’re planning to sell soon and are seeking a strong return on their investment. But while ROI can be measured in resale dollars and cents, it can also be measured in a sense of satisfaction, especially among those who don’t plan on moving.
Homeowner satisfaction figures large in the 2015 Remodeling Impact Report, a study of homeowners and real estate agents by the National Association of Realtors (NAR). Among the findings:
- 64 percent of respondents felt increased enjoyment in their home after completing a remodeling project.
- 75 percent experienced a significant sense of accomplishment when thinking of their completed project.
- 54 percent felt happy about the modifications to their home, and 40 percent felt satisfied.
- 38 percent remodeled because they wanted to replace worn-out finishes, surfaces and materials; 17 percent desired to enhance livability and add features; 13 percent felt it was time for a change.
Having a sense of joy in one’s home is a perfect reason for tackling an eyesore or making your home more livable for yourself and your family’s needs, Jessica Lautz, NAR’s managing director of survey research and communications in Washington, D.C., says.
“Homeowners remodel for an array of reasons, some because they just moved in and want to customize for their tastes, some because they are moving and need to update it for resale,” says Lautz. She adds that the highest “joy scores” garnered in the poll were: new bathrooms, complete kitchen renovations, new master/owner suites and hardwood flooring refinishes for interior projects. Outside, it’s new fiber-cement siding, new fiberglass or steel front doors, new roofing and new garage doors.
“People have a good feeling after a remodeling project when it achieves both the emotional and physical goals for which they were hoping. Emotionally, if you create a home that makes you feel better and which projects the image you feel represents you, you grow in self-confidence and satisfaction with your daily life,” Pablo Solomon, designer with Beverly Solomon Design in Lampasas, Texas, says.
Additionally, even if you plan to stay put for a while, “your money is better spent on remodeling now than sitting in a savings account drawing next to nothing,” Solomon adds.
Annual spending growth for home improvements is expected to increase to 6.8 percent in the second quarter of 2016, up from 2.4 percent observed in the second quarter of 2015, according to Harvard University’s Joint Center for Housing Studies.
“Homeowners may want to take advantage of current low interest rates and get their work done before building supplies get scarcer and it’s harder to find quality contractors,” Cheryl Reed, director of communications for Indianapolis-headquartered Angie’s List, Indianapolis, says.
Feeling good about a home fix can be its own reward. But consider that some improvement projects can also reap financial benefits for those who plan to remain in their homes for the indefinite future.
If you want to focus on projects with the highest resale value, even if listing your home won’t happen for years, consider what real estate agents surveyed in the NAR report recommended as projects that product the biggest financial results upon resale:
- refinishing hardwood floors (100 percent of project cost recouped upon resale)
- insulation upgrades (95 percent)
- new wood flooring (91 percent)
- converting a basement to a living area (69 percent)
- new roofing (105 percent),
- new garage doors (87 percent)
- new vinyl siding (83 percent
- new vinyl windows (80 percent)
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