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Houston's Source for News and Real Estate Information
A slowing market usually resembles a Buyers Market. Inventories rise and days on market increase in certain areas with lower sales. Sellers wishing to sell in the first quarter of 2009 find themselves among a larger inventory of homes fighting for buyer attention. Savvy Sellers understand that the first few weeks on the market are the most important. A great way to entice buyers and showcase your home above the rest is to enhance key selling features. Proactive marketing is essential in our market as buyers are comparing more inventories and previewing more homes. One of the benefits I offer my clients is advice on which remodeling projects bring the greatest added value at resale. While my experience has taught me which improvements are valued most in the Houston area, I weigh that against regional and national averages to draw the most accurate, statistically-sound recommendations for my clients. For our region, here's the average return on investment for some common projects:
Houston — Midrange Projects
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2008-09 National Averages
| Job Cost | Resale Value | Cost Recouped | Project | Job Cost | Resale Value | Cost Recouped | Change VS 2007 | $40,875 | $33,293 | 81.40% | Attic Bedroom | $48,398 | $35,694 | 73.80% | Down | $12,345 | $8,131 | 65.90% | Back-Up Power Generator | $14,040 | $8,026 | 57.20% | Down | $52,365 | $46,045 | 87.90% | Basement Remodel | $61,011 | $44,467 | 72.90% | Down | $32,502 | $23,482 | 72.20% | Bathroom Addition | $38,078 | $24,187 | 63.50% | Down | $13,984 | $11,663 | 83.40% | Bathroom Remodel | $15,899 | $11,857 | 74.60% | Down | $14,444 | $10,955 | 75.80% | Deck Addition (composite) | $15,277 | $11,260 | 73.70% | Down | $9,782 | $8,543 | 87.30% | Deck Addition (wood) | $10,601 | $8,676 | 81.80% | Down | $70,188 | $49,504 | 70.50% | Family Room Addition | $81,315 | $53,608 | 65.90% | Down | $49,218 | $35,922 | 73.00% | Garage Addition | $57,272 | $38,161 | 66.60% | Down | $25,969 | $16,007 | 61.60% | Home Office Remodel | $28,094 | $15,329 | 54.60% | Down | $52,111 | $42,536 | 81.60% | Major Kitchen Remodel | $56,611 | $43,030 | 76.00% | Down | $87,191 | $60,949 | 69.90% | Master Suite Addition | $101,571 | $67,037 | 66.00% | Down | $19,988 | $16,765 | 83.90% | Minor Kitchen Remodel | $21,246 | $16,881 | 79.50% | Down | $14,448 | $10,390 | 71.90% | Roofing Replacement | $18,825 | $12,336 | 65.50% | Down | $9,014 | $7,307 | 81.10% | Siding Replacement (vinyl) | $10,256 | $8,274 | 80.70% | Down | $65,300 | $37,523 | 57.50% | Sunroom Addition | $71,745 | $40,715 | 56.70% | Down | $128,376 | $94,207 | 73.40% | Two-Story Addition | $146,538 | $103,553 | 70.70% | Down | $9,189 | $7,036 | 76.60% | Window Replacement (vinyl) | $10,537 | $8,132 | 77.20% | Down | $10,063 | $7,830 | 77.80% | Window Replacement (wood) | $11,512 | $8,946 | 77.70% | Down |
Houston — Upscale Projects
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2008-09 National Averages
| Job Cost | Resale Value | Cost Recouped | Project | Job Cost | Resale Value | Cost Recouped | Change VS 2007 | $65,681 | $48,108 | 73.20% | Bathroom Addition | $74,325 | $49,100 | 66.10% | Down | $46,366 | $37,919 | 81.80% | Bathroom Remodel | $51,455 | $36,400 | 70.70% | Up | $35,322 | $23,990 | 67.90% | Deck Addition (composite) | $37,498 | $23,706 | 63.20% | N/A | $74,874 | $50,264 | 67.10% | Garage Addition | $85,844 | $53,908 | 62.80% | Down | $105,313 | $78,146 | 74.20% | Major Kitchen Remodel | $110,964 | $78,398 | 70.70% | Down | $201,723 | $133,96 | 66.40% | Master Suite Addition | $223,876 | $136,764 | 61.10% | Down | $28,847 | $20,249 | 70.20% | Roofing Replacement | $36,296 | $22,861 | 63.00% | Down | $12,831 | $11,331 | 88.30% | Siding Replacement
(fiber-cement) | $13,177 | $11,424 | 86.70% | Down | $11,220 | $9,086 | 81.00% | Siding Replacement
(foam-backed vinyl) | $12,528 | $10,074 | 80.40% | Up | $11,754 | $9,564 | 81.40% | Window Replacement (vinyl) | $13,608 | $10,781 | 79.20% | Down | $15,784 | $12,525 | 79.40% | Window Replacement (wood) | $17,580 | $13,455 | 76.50% | Down |
*Remodeling’s Cost vs. Value Report, copyright 2008-9 by Hanley Wood LLC & REALTOR magazine, Dec 2008 issue.
Your specific return on investment will depend on the value of your home, value of similar homes in your neighborhood or area. Other factors also include the availability and pricing of new homes, and the rate at which property values are changing in surrounding neighborhoods. Ultimately, a remodel can increase your equity when you sell. As you’ve noticed, bathroom and kitchen remodeling projects tend to render higher returns on the investments. Consider what other improvements are being done in the neighborhood for properties that have recently sold. You don't want to over-improve your home for the neighborhood! Other suttle changes such as painting, staining or staging the property can be good options if you haven't budgeted for remodeling repairs. Please also be aware that remodeling costs (price/sq. ft.) vary from neighborhoods - a project in Bellaire, West University, River Oaks and Memorial Villages will generally cost more than other areas such as Katy, Pearland, Inner City and other more affordable neighborhoods. Here are some recommended questions for your prospective remodeling contractors prior to entering into a contract:
- How long have you been in business?
- Are the part of the Better Business Bureau?
- If a Builder…Are they registered with the state?
- Who will be assigned as project supervisor for the job?
- Are they on site daily? If not, how often?
- Who is my primary contact during the project?
- Who will be working on the project? (employees or subcontractors?)
- What is your approach to a project such as this? (What happens first, next, and so on.)
- How many projects like mine have you completed in the past year?
- Will you provide me with a list of references?
- What percentage of your business is repeat or referral business?
- What trade associations do you belong to?
- Does the company carry the proper insurance coverage? (Ask for liability insurance certificate).
Let me show you the way... I understand that selling your home is just one of the tasks that face you when you're selling a house. I will help you decide which specific projects will maximize your home's sale price. I can assist you in the home selling process which includes offer negotiations, assisting in the inspection and proactive marketing. Buying? Beat other home buyers to the hottest new homes for sale in Houston with my New Listings Notifications. You'll receive updates via email to the properties that match your search criteria in the Greater Houston area. Considering selling down the road? Learn the market value of your home with no obligation. An estimate of your home's value will be sent to you by email. Receive a FREE Home Market Analysis via email with up to 4 properties that have sold in the last six months. Sincerely, Diego E. Jaramillo
Realtor, ABR, e-Pro
Keller Williams Houston Metropolitan
Cell: 832-282-2069
Online at www.HoustonHeritage.com Request a Free Market Snapshot! "Because my business is primarily based on referrals, I thank you in advance for your endorsement. If you or anyone you know are considering buying or selling a home, please think of me."
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