Honolulu Tops Nation for Return on Investment! Is it worthwhile to renovate you home? This is a burning question for homeowners who know that they will be selling sooner or later. But who wants to pony up the cash if you will just be trading dollars – or worse, if you won’t get your money back when selling time comes?
Here’s new proof that remodeling pays off when you sell. This is something that many of us have always sensed. Now it's a lot easier to take the leap. The 2009-2010 Cost vs. Value report is published annually by Hanley Wood LLC, and presented in Remodeling Magazine. This annual report tracks the average cost of 33 different remodeling projects, and also the resale value each project adds to the sale price. The data is separately analyzed for dozens of cities throughout the nation.
The percentage of return on each expense is very interesting. And the report now includes specific data for Honolulu, showing some very interesting results.
Honolulu tops the nation for the greatest return on investment for most of the 33 projects tracked in the report. Here is where you get the most bang for your buck.
Some Top Projects:
- Entry door replacement - $195% return on investment
- Wood deck addition -134% return
- Minor kitchen remodel -121% return
- Vinyl window replacement 117%
- Siding replacement with fiber /cement siding (121.4%)
- Grand Entrance (112%)
Return on investment really rocks in Honolulu and beats out the other states.
In our fair state, only 5 of the 33 tracked projects scored less than 90% return. Compare that to the Pacific region as a whole, where only one of the 33 projects scored over 100% - Entry door replacement. Basically, you are nuts if you try to sell a home with a beat-up entry door if you reside in any state that touches the Pacific Ocean.
Here are more details on the other projects and their expected return in Honolulu compared to the national averages:
| Highlights from Cost Vs Value Report 2009-2010 |
| | HONOLULU | NATIONAL AVERAGES |
| Project Type | Job Cost | Resale Value | Percent Recouped | Job Cost | Resale Value | Percent Recouped |
| Basement Remodel | $74,430 | 81,658 | 109.7% | $62,067 | 46,825 | 75.4% |
| Bathroom Remodel | 18,231 | 17,604 | 96.6% | 16,142 | 11,454 | 71.0% |
| Deck Addition Wood | 13,447 | 17,948 | 133.5% | 10,634 | 8,573 | 80.6% |
| Family Room Addition | 104,837 | 98,398 | 93.9% | 82,756 | 54,051 | 65.3% |
| Home Office Remodel | 31,239 | 28,697 | 91.9% | 28,375 | 13,648 | 48.1% |
| Major Kitchen Remodel | 63,060 | 66,009 | 104.7% | 57,215 | 41,260 | 72.1% |
| Minor Kitchen Remodel | 22,931 | 27,775 | 121.1% | 21,411 | 16,773 | 78.3% |
| Siding Replacement | 13,974 | 14,333 | 102.6% | 10,607 | 8,476 | 79.9% |
| Copyright 2009 Hanley Wood LLC. Reproduced by permission. Complete city data from the Remodeling 2009-2010 Cost vs. Value report can be downloaded free at www.costvsvalue.com. |
Main Trends to Watch:
*Smaller projects pay off best. In a tough economy, cheap is beautiful so skip the bling and go basic.
*Curb appeal rules. Buyers judge homes by their "Drive By" appearance, and pass on those whose charms are hidden inside. 8 of the 10 top projects are outside your home.
*Replacement of existing features is a top return – and among the cheapest.
*Kitchens and Bath remodels pay off, but go for a well-done basic remodel rather than a luxury or complete renovation. Buyers love the perks, but don’t want to pay full value for them.
*Local trends apply. Talk to your real estate professional before you renovate. Experience and local knowledge will guide you to the projects that pay off best in your neighborhood.
Get The Report
For a detailed view of this useful and extensive research, click here www.costvsvalue.com for the full report. Wonder how all this research was compiled? It’s all there. Just what precisely is an “attic bedroom remodel?” Well, that is explained as well. " Midrange kitchen"? It's all here. And who the heck came up with all these numbers? It's explained in detail.
Honolulu Is Different
You already knew that, but why are Honolulu buyers willing to pay more for improvements than buyers in other states? My opinion: Here on Oahu we have a shortage of spiffy new homes, so buyers seek out renovated homes and will pay a premium for them. In some of the best neighborhoods the typical house or condo is at least 25 years old, so the ones that don’t need work get grabbed by eager buyers.
Why do we have more homes that need work than elsewhere?
My theories:
- Convenient areas were built first leaving little land to develop new homes
- Little money left in your pocket to repair or maintain after buying our expensive homes
- "Polynesian Paralysis", or that laid back tropical attitude
- Pesky critters such as termites, fungus, and dry rot
- No handymen in sight
- Aging population staying put as long as possible
Should You Wait to Renovate?
We are very fortunate that our fair city of Honolulu is now included in this annual survey. With this wealth of information every homeowner can maximize their home renovations with an eye to a smart future home sale. But why wait? Fix it up now so that you can enjoy it before you pass it on to the next owner.
If you need personalized help deciding on renovations prior to selling, I am happy to help. Email me directly here mailto:stephanieg@remax.net or contact your real estate professional. If you contact me through feedback within this column, I am unable to respond to you directly.
Copyright 2010 Stephanie Gieseler, Honolulu, Hawaii. All rights reserved.
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