How Much Equity In Home Improvement Projects?

Consumers are doing lots of home improvement projects with about $110 billion in total volume this quarter.

Overall, these projects are not creating a lot of added home equity value. You may still have great reasons to do a project, but it does not hurt to look at these stats before doing so.

Remodeling Magazine reports in their Cost vs Value Report 2011-2012, that for each home improvement dollar spent in 2012, homeowners can expect to recoup just 58 cents in home equity.

This is way down from 2005, when the cost-to-value ratio was 87 percent.

It pays to consider which projects will help your home equity.

Remodeling Magazine's "Mid-Range Project" list :

• Steel Entry Door Replacement : Cost, $1,238; Recoup, 73.0%
• Attic Bedroom : Cost, $50,184; Recoup, 72.5%
• Minor Kitchen Remodel : Cost, $19,588; Recoup, 72.1%
• Garage Door Replacement : Cost, $1,512; Recoup, 71.9%
• Wood Deck Addition : Cost, $10,350; Recoup 70.1%

Projects which have a relatively low cost-to-value ratio include the following. Consider them if they have a high personal value, but not necessarily for their home equity value:

• Home Office Remodel : Cost, $27,963; Recoup, 42.9%
• Sunroom Addition : Cost, $34,133; Recoup, 45.9%
• Backup Power Generator : Cost, $14,760; Recoup, 47.5%
• Bathroom Addition : Cost, $140,096512; Recoup, 51.0%
• Fiberglass Entry Door Replacement : Cost, $3,536; Recoup 56.3%

Projects that include the replacement of doors, siding and windows occupy the list's first 6 slots in the cost-to-value ratio.

As always, if you live in the Northern Virginia area or are planning a move to this area, we are here to help you learn what is available in both the new and resale home market. Let us know how we can help!

You can see the complete Cost vs Value report online.

[The Kathy O’Neal Team serves home buyers and sellers in Northern Virginia, with special focus on Chantilly, Centreville, and the communities of the Western Fairfax region.]