Americans are buying homes. The month of October experienced the sharpest increase this year, leading some pundits to forecast that the lethargic housing market is finally turning around. According to the National Association of Realtors, sales of existing homes increased a modest 1.5 percent.
Third quarter numbers in Manhattan were somewhat tepid. The Elliman Report for the third quarter of 2014 found that the average sales price of a home was up 0.3 percent to $1,1684,729, number of sales were down slightly 0.4 percent at 3,328 and a median sales price showed a modest decline of 0.2 percent. The Report pointed to an insufficient supply of available homes that did not meet demand, a change of interest toward larger units, and bidding wars as contributing to rising prices.
New Yorkers who are in the market to sell their home may see a mixed bag, but trends appear to be somewhat encouraging.
Still, if you are planning to sell your home, you may want to figure out ways to increase the bottom line. Willingness to spend some money on improvements can help attract buyers.
However, you need to realize that the return of your investment is affected by a lot of things, including the value of your and your neighbors’ home and the housing market where you live, how long it takes to sell the property after refurbishing, and the worth of the project. For example, you want to make certain that the cost of the improvement isn’t overvalued when compared to the price of the home. Placing $20,000 worth of marble on the foyer’s floor doesn’t make sense in a house that’s valued at $200,000.
Start Practical With a Midrange Budget
Experts say that you should keep it simple on your initial plunge into improvements. Remodeling Magazine advised that you should concentrate on basic home maintenance before any major kitchen or bathroom work.
Keep in mind that you want to attract buyers to your home so appearance is paramount. Sprucing up your garden; and replacing the windows, front and garage doors, and painting are good ways to make a good first impression. Replacing the front door can get a return of 96.6 percent for an average price of $1,162; exchanging the garage door could have an average cost of $1,534 and earn you an 83.7 percent return. Painting the exterior and interior of your home enhances appearance on a little investment. Depending on your budget, you can do the work or hire a pro. The pro could cost from $3,600 to $6,000 for painting a room and $5,000 or more to coat the exterior. Also keep in mind that the buyer doesn’t want to worry about the basics. They expect that the roof won’t leak and the air conditioner system and the plumbing function
Basic works that can fetch a good return on investment include siding replacement, which is supposed to recover 92.8 percent of costs. If you want to get a little bit more adventurous with your budget, then you might want to consider adding a deck, which costs on average $9,539 and can return 87.4 percent of the cost; or a modest kitchen adjustment that costs around $15,000 for a return of 92.9 percent. Replacing the roof and windows could also be a priority. It could bring you a return of 80 percent or better in a resale.
More Costly Projects
The next level of renovation would be re-doing a room – bedrooms, bathrooms, basement, and kitchen.
Return of investment (ROI) and the cost of the work are good determining factors in deciding what rooms you should consider remodeling. Here’s a review of room re-do by priority based on cost and average return on investment.
A minor bathroom remodel can cost about $10,500 and include replacing the tub, tile surround, floor, toilet, sink, vanity and fixtures. ROI is 102 percent. Not all of the work needs to be done by a contractor. For example, you can do the re-caulking, replacing wall covers or slapping on a coat of paint. The tub doesn’t have to be removed. Its surface can be re-glazed for a cost of $300 to $400.
- A minor kitchen remodel can average $14,913 with an ROI of 98.5 percent. This type of re-work is ideal if the kitchen just needs a cosmetic improvement.
- Major bathroom remodel includes expanding the space, moving and replacing the tub and toilet, replacing sink and faucets with designer versions, adding a linen closet, installing lighting and ceramic tile floor and exchanging the exhaust fan. Cost of the work could be $26,052 and your ROI is 93.2 percent.
- Major kitchen remodel in a midrange home averages $43,862 with a return of 91 percent. Work includes cabinets, island laminate countertops, stainless steel sink, wall oven, cook top, vinyl floor, and appliances.
- Basement remodel has an average cost of $51,051 with a return of 90.1 percent. Work would include entertainment center and wet bar, bathroom, recessed lighting and laminate floor.
- Family room addition has an average cost of $54,464 and you regain 83 percent. Some family rooms, feature a sunroof, but only in upscale neighborhood.
- Living room décor update includes new light switches, outlet covers, floor registers, crown molding, chair rails and drapes. Average cost is $1,350 with a return of 66 percent.
- Bedroom update includes new lighting for between $110 and $500. ROI 52 percent.
- Living room update of walls and floors will have a varied price depending on the square footage for flooring or carpet and whether you decide to keep the old carpet and have it cleaned. Whatever the final price, the return is expected to be 40 percent.
Of course, all the remodeling does not have to be done at the same time. You can handle the task better if you do the work over time. Priorities can be determined by the cost of the project – the least cost with the highest return has the higher priority it also depends on the condition of your home. For example, if the rooms or fixtures look worn and the paint is fading, then work on these things first. If you plan to sell soon, then concentrate on the visual enhancements, including the exterior of the home, doors, garden, basic maintenance.