With the cost and competition for home buying at historically high levels, many homeowners are opting to remodel their current home to better meet their needs.
Remodeling can add value to your home in both intrinsic and monetary measures. Over a couple of articles, we’ll look at each of these metrics. Today we’ll start with the sheer joy of it – the intrinsic value of bringing pleasure to the resident homeowner. This has been named the “Joy Score” in a joint study from the National Association of Realtors (NAR) and the National Association of the Remodeling Industry (NARI) – the 2022 Remodeling Impact Report.
The study shows that homeowners embark on remodeling projects for a number of reasons – from fixing up and replacing outdated surfaces for improved aesthetics – reported by 14% – to making the floor plan better suit the resident’s functional and livability needs – noted by 35% of homeowners.
“In some instances, homeowners were content with sprucing up a room with a simple paint job, while in other cases, families decided to take on the task of renovating an entire attic or basement to add additional living space to their home,” said Jessica Lautz, vice president of demographics and behavioral insights at NAR.
“The pandemic has changed the way we use our homes, and many of those changes are here to stay,” said Lautz. “As a result, homeowners needed to reconfigure or remodel how they use their home and maximize space.”
No matter the intention, the dollars spent were significant. In 2020, Americans spent $420 billion on home remodeling, the report states. While some projects were driven by pandemic-caused changing needs – 90% of NARI members cited a greater demand for contracting remodeling during the pandemic – 83% of consumers say they would have remodeled regardless of COVID-19. Yet once they caught the remodeling bug it tended to linger, evidenced by 86% of consumers reporting that one act of remodeling led to another in other areas of the house.
But let’s get on with remodeling projects high on the Joy scale. The NAR/NARI report marked projects that made the renovators want to remain home or sparked an increase of enjoyment among occupants, received a high Joy Score, with 10 being considered a perfect Joy Score.
Painting a home’s interior, adding a home office, installing hardwood flooring and closet renovations all received a perfect Joy Score in the NAR/NARI joint study.
Hardwood floor refinishing received a 10 Joy Score. Homeowners felt happiness and satisfaction in their home after undertaking the upgrade – 64% said their enjoyment was increased and another 64% said just thinking about the completed project provided a major sense of accomplishment.
Adding a new home office also earned a perfect Joy Score with a whopping 91% saying they have a greater desire to be home and 73% expressing an increased sense of enjoyment.
Tasks awarded perfect scores of 10 included: painting a home’s entire interior, painting one room, adding a home office, hardwood floor refinishing, closet renovation and insulation upgrades.
Kitchen upgrades got a near-perfect 9.8 Joy Score. The top reason for a kitchen redux was to upgrade worn out surfaces, finishes or materials, followed by a need to add features and improve livability.
The NAR/NARI report also evaluated the estimated cost-recovery for the projects. According to NARI remodelers’ cost estimate, the average kitchen remodel would be about $45,000. Realtors estimated that $30,000 – or 67% – could be recovered.
For interior projects, refinishing hardwood floors brought the highest percentage of recovered cost at 147%. New wood flooring cost-recovery was 118% and an insulation upgrade was 100%. Among exterior projects, new roofing and a new garage door both recovered 100% of the project costs.
Stay tuned until we into the remodeling projects that bring the highest monetary return on your investment.
Read the full report on the NAR analysis at: nar.realtor/newsroom/remodeling-new-hardwood-floors-and-home-offices-bring-most-joy.
By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder, the local residential real estate company he established in 1977. He was inducted into Boulder County’s Business Hall of Fame in 2016 and has a 40-year background in commercial and residential real estate. For questions, email Tom at [email protected], call 303.441.5620, or visit boulderco.com.