Sustainability became “hot” in 2023, putting carbon reduction at the top of the list of home improvements that bring value nationwide, according to the Remodeling 2023 Cost vs. Value Report (CVV) on home renovations that deliver the best return on investment (ROI).
HVAC conversion – or heating, ventilation and air conditioning – ranks the highest ROI renovation for the first time, returning 104% of dollars invested nationwide and 114.5% in the mountain states of New Mexico, Idaho, Nevada, Arizona, Colorado and Utah, reports CVV (www.costvsvalue.com). An HVAC project includes removing an oil or gas furnace and replacing it with an electric heat pump that is appropriate for the climate zone,” write the CVV analysts. Operating home HVAC systems consumes the largest amount of home energy, according to the recent Energy Information Administration (EIA) data.
Heat pumps are gaining traction as the solution to replace the typical HVAC system. “Heat pumps have grown in popularity because they provide both heating and cooling. The conversion from a furnace or boiler to a heat pump provides the added value of summertime cooling without a separate air conditioner. New inverter technology has also made heat pumps viable for heating in northern states, erasing the discomfort problems that previously plagued their use in cold climates,” according to the CVV report.
Overall, the average ROI value of remodeling projects fell in this year’s CVV report. Though some projects have high returns that exceed 100% in 2023, “those at the lower end of the ROI range have dropped well below 50%, with the overall cost–value ratio down to 34.8%, the lowest in the history of the report,” according to CVV analysts.
Projects that still hold weight in the eye of the buyer: exterior replacement projects. Real estate professionals aren’t surprised by this finding. Realtors’ experience shows that if a buyer’s first impression of a home is favorable, they view the home more positively overall.
Here are the remodeling projects that topped the mountain region for the best ROI in this year’s report:
HVAC conversion to electric
The highest ROI on remodeling is converting from a fossil-fuel-burning furnace to an electric heat pump for heating and cooling a 2,000-square-foot home in the mountain states. The return is 114.5% on an $18,155 investment. Plus, you are doing your part to reduce carbon emissions into the atmosphere.
Siding replacement to fiber-cement siding
New siding makes your home look fresh and returns 107.4% or $20,792 on a $19,861 investment to replace 1,250 square feet of existing siding with new fiber-cement siding, factory primed and factory painted.
Garage door replacement
This is a Colorado favorite and for good reason. A stylish new garage door makes your home pop with curb appeal. That’s probably why this $4,529 investment returns an estimated $4,516, or 99.7%. The project analyzed is to remove and replace a 16×7-foot garage door and its tracks with one made with high-tensile-strength steel with two coats of factory-applied paint. Windows in the top panel are ½-inch insulated glass. This doesn’t include a new motorized opener.
Manufactured stone veneer
A natural for Colorado, this trend delivers $10,655 on an $11,014 investment or 96.7%. The estimated cost is a 300-square-foot adhered manufactured stone veneer, including 36 linear feet of sills, 40 linear feet of corners, and an outlined entry archway.
Siding replacement to vinyl
Once again, replacing your home’s siding brings high ROI – this time using vinyl as the replacement material. The return is 92.9% of the money spent to do the job. The project costs $17,435 for 1,250 square feet and returns an estimated $16,202.
The value figures in the CVV report, published by Zonda Media’s Remodeling ezine are derived from a survey of more than 6,000 realtors surveyed in Q4 2022. Zonda Media notes that this year’s survey was conducted during one of the lowest points in the real estate market in a decade.
The complete remodeling 2023 cost vs. value report data can be downloaded free at costvsvalue.com. Read the full article at remodeling.hw.net/cost-vs-value/2023/mountain.
By Tom Kalinski. Tom is the broker/owner of RE/MAX of Boulder. He 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.