A new joint study from the National Association of REALTORS® (NAR) and the National Association of the Remodeling Industry (NARI) is breaking down some of the changes in home improvement projects, as both the underlying costs and timing, along with consumer preferences, have evolved against the backdrop of the pandemic.
Measuring consumer sentiment as well as the dollar value added versus cost in the face of ballooning supply and labor costs, the study found that finishing hardwood floors topped the list for both homeowner satisfaction and value. New or refinished hardwood floors and insulation upgrades also ranked highly in both these metrics, while adding a home office brought satisfaction without fully recouping costs.
For exterior projects—often more expensive—new roofing or new garage doors also recovered 100% of cost through an increase in home value.
“This report is the first one to measure the impact of the pandemic on the price and relative value of various remodeling projects,” said Chris Egner, President of NARI in a statement. “We are glad that NARI members, who are among the most experienced remodelers, could provide realistic estimates of remodeling costs in line with the criteria specified in the survey.”
Increased time spent at home either working or due to pandemic restrictions on many activities was thought to have pushed consumers to invest money in home upgrades, but that narrative was not totally validated by the study, with 83% of survey respondents saying they would have undertaken projects regardless of the pandemic.
At the same time, consumers spent $420 billion on remodeling in 2020, and 90% of NARI members reported a greater demand for remodeling since the onset of COVID.
“Our study revealed that homeowners tend to undertake a remodeling project for any number of reasons,” said Jessica Lautz, vice president of demographics and behavioral insights at NAR, in a statement.
More than a third (35%) of respondents said their remodeling project—whatever it might have been—increased functionality and livability. Only 14% said the most important improvement was aesthetic.
The takeaway:
According to Lautz, the desire to remodel for function will not disappear based on current trends as people fundamentally change what they need in a living space.
“The pandemic has changed the way we use our homes, and many of those changes are here to stay,” said Lautz. “As a result, homeowners needed to reconfigure or remodel how they use their home and maximize space.”
How remodeling projects were completed varied broadly, with 35% hiring a professional for the entire project, while 28% provided their own materials while still hiring a contractor. Twenty-two percent were undertaken fully by the homeowner with no outside professional assistance.
A vast majority (86%) of consumers said that one remodeling project inspired them to remodel other areas of their home. A majority of NARI members (60%) also reported an increase in the scale of projects, which they attributed to the pandemic.
“In some instances, homeowners were content with sprucing up a room with a simple paint job,” said Lautz, “while in other cases, families decided to take on the task of renovating an entire attic or basement to add additional living space to their home.”
Though Lautz added that many people chose remodeling projects that would increase home value, plenty of projects were popular without being especially positive for appreciation. Kitchen remodels, for instance, on average recouped only 67% of cost, but received an almost perfect satisfaction rating from consumers. The average kitchen remodel costs about $45,000.
Read the full report here.
Jesse Williams is RISMedia’s associate online editor. Email him with your real estate news ideas, jwilliams@rismedia.com.
