Bathrooms are receiving a lot of attention from homeowners who are staying put rather than braving a housing market beset by high prices and climbing mortgage rates.
Last year, according to one major supplier, sales revenue from vanities with countertops grew 27 percent. Sales of soaking and jetted tubs were up 22 percent, and sales of tub and shower surrounds grew 20 percent – even while prices of those products were up roughly 20 percent.
Hopefully, owners who chose to remodel are enjoying their new spa-like retreats. Because if they went to all that trouble so their places would sell for more, they likely won’t come out ahead.
60 Cents on the Dollar?
Actually, you won’t come out ahead on any of the 34 different remodeling projects covered in a new report from Today’s Homeowner, a media company based in Mobile, Alabama. You’ll only get back 60 cents on the dollar for a midrange bathroom remodel.
In hard dollars and cents, if you spent $15,737 to update a 35-square-foot bathroom with a new tub, vanity, toilet, lighted medicine cabinet, tile floor and wallpaper, only $9,500 of your eventual selling price can be attributed to the remodel.
You’d do a tad better by spending big bucks for an upscale bathroom addition, according to the research. It will cost $74,882 to add a 100-square-foot bath with a high-end soaking tub, shower, stone double vanity, separate commode area and in-floor heating. But when you sell, just 64 percent of that – $48,020 – will be recovered.
You’d do even better by making a bathroom in your house wheelchair-accessible, with wider doors and an accessible toilet and shower, along with various cosmetic improvements. Here, the cost would run $16,554, but you’d get back $13,000 – 78 percent of your outlay – when you sell.
There are all kinds of surveys like this one. The trade journal Remodeling has one, the National Association of Realtors has another, and so does Modernize.com. But they rarely agree on which home projects are worth the time, expense and hassle.
The differences, basically, rest in their methodology. While some surveys rely heavily on the opinions of local realty pros, the Today’s Homeowner study took a “very granular” approach to both sides of the equation, said researcher Elizabeth Thibodeau, whose firm, Three Ships, conducted the study on behalf of the media company.
On the cost side, researchers built a data set based on discussions with suppliers, who were then vetted by contractors. And on the value side, they combed through 70,000 Redfin listings in 1,300 cities, looking for a number of geo-specific factors.
Local Market Matters
Of course, just as all real estate is local, so, too, are all remodeling projects. The cost-vs.-value figures mentioned above are all national averages, meaning that some undertakings do better on the local level – and some do worse.
For example, replacing a garage door was the only project with a 100 percent payback on the national level in the Today’s Homeowner study. But do that in San Francisco and you’ll get back 180 percent of the cost when you sell.
Nationally, a screened-in porch nets only 92 cents on the dollar. But add one in Honolulu and your return will be 182 percent. (In decidedly colder Cleveland, your return will be just 72 percent.)
Similarly, replacing vinyl siding, a net 91 percent expense nationally, is worth 140 percent in Seattle, according to the study, but just 83 percent in El Paso.
Pools Better Than Reputation
The research also found some interesting anomalies. For one thing, the least expensive improvements tended to offer the greatest returns. Take that garage door again. The cost, a little over $2,000, had the same return, at least nationally. Replacing your windows, adding a concrete patio, installing hardwood floors and replacing your gutters also did fairly well.
On the flip side, finishing a basement had the worst ROI of any of the projects covered. The cost nationally was estimated at nearly $50,000, but the price gain at sale was just $11,300 – a measly 22 percent. Other big-ticket improvements such as remodeling a kitchen did twice as well, but still only earned back about 53 percent.
Another surprise, at least on a national basis, was the return on adding a backyard swimming pool.
The conventional wisdom is that pools are a poor investment: one that turns off many buyers who don’t want the maintenance, hassle or cost. But the research found that an in-ground pool that cost $46,802 coincided with an extra selling price of $42,150 – a 90 percent return.
Also, while replacing your old, worn-out appliances is always good for living more comfortably, you can expect to get back 74 cents on every dollar you spend. If you’re redoing your kitchen, stay away from the more costly counters: The net on both quartz and granite is only 62 percent.
Finally, homeowners who are about to put their places on the market would do well to invest in their homes’ exteriors: All seven projects with an ROI exceeding 90 percent in the survey were outside jobs, including siding, roof and gutter replacements.
Lew Sichelman has been covering real estate for more than 50 years. He is a regular contributor to numerous shelter magazines and housing and housing-finance industry publications. Readers can contact him at firstname.lastname@example.org.