April 01, 2015 — Austin
Home remodeling projects in Texas’s major cities continued to be popular and profitable in 2014, according to the 2015 Texas Remodel Valuation Report released today by the Texas REALTORS®. The report analyzes the recoup costs in 2014 for more than 20 different remodeling projects nationwide, in the West South-Central U.S., and in Austin, Dallas, El Paso, Houston, McAllen, and San Antonio.
Scott Kesner, chairman of the Texas REALTORS®, commented, “With housing demand at an all-time high in Texas, even the smallest remodeling projects can contribute to a home’s resale value. Texas homeowners don’t have to make a large investment for their home to sell faster or at a higher price.”
Four of the five Texas markets in the report showed gains in project recoup costs in 2014, excluding Houston, which showed small declines in recoup cost growth. For the second year in a row, functional remodeling projects were significantly more profitable than upscale remodels and additions.
According to the report, the most profitable remodeling projects were dominated by those that boosted a home’s curb appeal. Steel entry door and garage door replacements ranked among the top five projects in most markets, recouping up to 113.2% and 107.6% of recoup costs, respectively. Siding, roofing, and window replacements – and a new project, stone veneer accents – also frequently yielded higher returns than costs.
Projects that maximized a home’s existing square footage and sustainability continued to be popular in 2014, but less so than in 2013. Basement remodels recouped up to 98% of project costs, but attic bedroom additions – popular in 2013 – were no longer a top project. Backup power generators, the most profitable project in the 2014 report, remained a top project in only two markets yet still recouped up to 129.2% of project costs.
Conversely, big-ticket projects and upscale additions were increasingly less profitable in 2014. The least profitable project in most markets – sunroom additions – recouped only between 29.3% and 51.8% of the total project cost, 10% less on average than in 2013.
Kesner concluded, “The most profitable remodeling projects vary not only from market to market, but on a neighborhood-by-neighborhood basis as well. A Texas REALTOR® can explain which home improvements are typical for a seller’s neighborhood and are most popular among area homebuyers, as well as provide recommendations for reputable contractors who perform high quality work.”