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A study was conducted in 101 U.S. cities comparing the average cost of 35 common house remodel projects to the value the house received at resale. As a nation, the ratio of the cost of projects versus the value at resale has increased for the second year in a row. The closer the ratio is to 100%, the more equal the cost and value. If the ratio is above 100%, than the homeowner is making a profit by improving their house and then reselling it. The past two years, 2012 – 2013, have seen improvements in the cost versus value ratio. Therefore, home improvements are increasing in their benefits.

In comparison to last year, construction costs increased by 2.2%, but the resale value of residential housing grew by 11.5%. The great increase in value contributed to the growth in the cost versus value ratio. This is a noteworthy trend because it means the value of residential home resale is leading market improvement.

Nationally, the top five improvements conducted in homes in 2013 were:

  1.  adding a back-up power generator
  2.  adding an attic bedroom
  3.  adding a wooden deck
  4.  replacing an entry door
  5.  remodeling a home office
  6.  adding a sunroom

The generator and attic bedroom were popular additions due to the inclement weather that occurred last year.

Specifically in the Pacific, the top projects with the greatest cost versus value ratio (all above 100%) were respectively: an entry door replacement, a wood deck addition, a minor kitchen remodel, an attic bedroom addition, a basement remodel, a wooden window replacement, and a vinyl window replacement.

In comparing replacement or remodeling projects, both projects rise and fall together depending on the market, but replacements have consistently done better since 2003. From 2012 to 2013, replacement and remodeling projects increased by 10% in their ability to recoup the cost. Nationally, door, window, and siding replacements (lower costing projects) have done better than any larger remodeling and replacement changes. Steel entry door replacements have been ranked number 1 since 2009, when it was first introduced. It is the only house project that had a return rate greater than 90%. Despite being at a higher cost, kitchen remodels and replacements are more financially beneficial than bathroom changes when the house is resold.

California occupied 3 of the top ten cities for high cost versus value ratios. San Francisco was 2nd, San Jose 3rd, and San Diego 4th in cost recouped after home remodeling and replacements. All 10 cities had a cost versus value ratio above 80%, with the top two cities having a ratio above 100%. As expected, the Pacific region of the U.S. had the greatest cost versus value ratio.

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