Is the fox watching the henhouse? You tell me.
According to a Cost vs Value Report by the National Association of Realtors, putting your efforts on the exerior appeal of the home was more cost effective for resale than other improvements.
The report further claimed that upscale siding installation was the repair that gave you more at resale (88% of costs.) Wait a minute… what kind of siding? Was it cedar siding? Was it hardboard Masonite? Was the existing siding rotting away? The report did not say. I am wondering if there were too many confounding variables for the study to be meainingful. Maybe a few cans of paint would have been all that the house needed. Paint is almost always the fastest equity you can get… especially if you do it yourself. I am also wondering if the results of the study had anything to do with who was conducting it,
Please note that the this study was produced by Hanley Wood, LLC, in conjunction with REALTOR Magazine. I Googled Hanley Wood LLC. This company is a media company for builders and the construction industry….people who make things with wood… HMMM.
The report also stated that installation of a new wood deck addition would mean an 85% recovery of cost. GONG! (Do you remember the “Gong Show?” ) No way. In the last 15 years, all the sellers I have known feel they got absolutely clobbered after putting a new deck on the property prior to sale. Lumber is expensive, you know. So is the work. They fared a little better if they did the work themselves. Now, if there was a deck that was already there, and it was rotten and wobbly, it might be harder to sell the house. But I am not sure that the replacement costs were seen at all at the closing table. In Minnesota, most decks are on the back side of the house anyway. They don’t even play into the curb appeal factor.
New windows were said to recoup 80%. The report also indicated that most interior improvements did not prove to be very profitable. How come they did not study the impact of fresh paint and new carpet? After all those improvements don’t cost very much, and are commonly recommended by seller’s agents.
The must unsurprising discovery was that back-up generator installments fared the worst for profitable home improvements. It did indicate that they recovered more of their costs on re-sale in places like Arkansas, South Central Texas, Louisiana, and Oklahoma. Why is that? More hurricanes and tornadoes? Maybe there are more hard-core survivalists down there. The cost recovery for bomb shelters was NOT included in the study.
Before you hire someone to re-side your house or build a deck, you might want to get an agent out there to look at the whole property first. Those might be good improvements, and they might not be, depending upon the condition of the rest of the house. Maybe its a bit subjective, but agents usually know how buyers will respond to properties and how improvements might factor into their bidding.
I always wonder about studies like this. How do they really know how much the sales price changed because of some work. How scientific could this study be? Maybe there were some secret research neighborhoods of homes that are exactly identical, and there was a “control” group of homes, all variables were accounted for, etc. And what did they use as a baseline to make the calculations? Did they use the price that the buyer thought he should get, or did the sell the house first, and then re-sell right after the improvements were made?
And why was Hanley Wood LLC chosen to do this study, anyway?