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No wonder that outdoor spaces are valued more than ever. The coronavirus pandemic sent us all home for a year, and once we cooped up inside, we longed for improved outside areas.
The home renovation market boomed last year and is now continuing to flourish. Exterior renovations top the list of the most value-adding projects. Eleven of the top 12 investments were exterior renovations, with the exception of a minor remodeling of the kitchen. This emerges from the 2021 cost-value report from Zonda Media, a market research and analysis company for residential construction.
Overall, however, homeowners only get a 60% return on their home renovation investments. This is a year-over-year decline and well below the decade high of 71.2% in 2014 as renovation costs have risen sharply for both materials and labor. Disruptions in the supply chain due to the pandemic and global trade tariffs have contributed to the cost increases.
“The trend for outdoor replacement parts, outperforming larger remodeling projects at its own discretion, has undoubtedly sped up a year with Covid hesitating to have contractors in their homes but want to improve the outdoor spaces,” said Clayton DeKorne, chief editor-in-chief the magazines Remodeling and JLC.
“Exterior facelifts improve the curbside appeal and make a great first impression when buyers approach the home,” he said. “That means real dollars at the close, which is why we are seeing such tangible returns on these investments.”
The majority of the projects with the highest return on resale related to the appeal of the curb. Replacing garage doors resulted in a 94% return on investment. The stone veneer produced came second with a return of 92%, and a smaller kitchen remodel offered a return on investment of 72%. Adding an aft deck, which was very popular with homeowners over the past year, results in a 66% return on investment for wood and a 63% return on composites.
Other high-yielding projects include replacing vinyl windows and siding, as well as upgrading to a steel front door.
The report gives some insight into what is popular today, but cost-value analysis is not all about popularity, especially given the rising cost of materials like sawn timber. The effects of the increase in material costs are broadly presented for all projects, with the return on investment falling by an average of 3 percentage points for all projects, according to the report. In the case of wooden decks, this return has fallen by over 10%, as the cost of wood has increased by over 300% compared to the previous year.
A small remodeling of the kitchen brought high returns, but surprisingly no major remodeling in the kitchen or bathroom. The Zonda survey found that these projects tend to be too individual and do not have broad appeal to buyers.
The value to the current homeowner, while not monetary, is extremely high given the nesting. Because of this, there are massive delays in new devices and fixtures due to the extremely high demand.