Boston Downtown Real Estate: Renovations ROI {Infographic}
Boston Condos
Boston Downtown Real Estate: Renovations ROI {Infographic}
Renovation spending has surged since the onset of the pandemic, according to the 2024 Houzz & Home Study from home renovation and design company Houzz.
In 2020, median renovation spending was $15,000. That amount increased by 60% in three years, with the median home renovation costing $24,000 in 2023. Furthermore, 51% of renovators spent $25,000 or more last year, up from 37% in 2020.
“Despite prevailing economic headwinds, such as high interest rates and persistent inflation, investment in home renovations continued in 2023,” Marine Sargsyan, Houzz staff economist, said in a press release. “The increase in spend and shift to larger-budget projects is likely driven by rising product and labor costs.”
That makes sense, considering that while the amount homeowners spend on renovations has increased, the number of homeowners undertaking renovations has actually decreased: 56% of homeowners took on renovation projects in 2023, down from 58% in 2022.
Cash from savings continues to be the main way homeowners fund their renovations, at 83%. Credit card spending is the second-most common source of funding, at 37%, up from 28% in 2022. The most popular purchase for home renovations in 2023 was paint, with 64% making the purchase, followed by light fixtures at 52% and new faucets or shower heads at 49%. Major kitchen appliance purchases dropped by 4%, with only 32% of renovating homeowners opting to swap features like dishwashers, fridges or ovens.
That being said, the most commonly renovated room in the house was the kitchen, with 29% of renovators opting to redo the space. That’s closely followed by guest bathrooms at 27% and primary bathrooms at 25%. However, the average homeowner takes on approximately three interior room upgrades and two or more outdoor projects during the typical renovation.
Following 2022 trends, Gen X homeowners spent the most on renovation projects last year with a median spending of $25,000. In comparison, the median baby boomer spent $24,000. These two generational groups continue to drive renovation spending — while Gen X spent the most money last year, Boomers took on 56% of all home renovations. Millennials trailed by a large margin, making up only 9% of all renovations and spending a median of $20,000.
Boston condos for sale and the bottom line
Despite generational differences in spending, nearly all renovating homeowners hired professionals to get the job done, at 91%. The average renovating homeowner enlisted 1.7 service professionals in 2023, the same as 2022.
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Boston Downtown Real Estate: Renovations ROI {Infographic}
In most cases, Boston condo owners can sell their condominium as it is without any upgrades. I always recommend cleaning and some fresh paint and fixing plumbing leaks and electrical problems. If the water is old and rusty it is best to replace it before putting the house on the market.
No two Boston Beacon Hill condos for sale are the same and home buyers are unique too so there isn’t any hard and fast rule as to what kind of payback, if any, there might be on a specific upgrade. In general smaller improvements tend to pay for themselves. Examples include exterior doors, a new backsplash, some new light fixtures and some new kitchen appliances.
Here are some numbers from the National Association of Realtors:
Recovery on remodeling costs
Even though it is true that a renovated kitchen will help sell your Boston Back Bay home sellers usually spend more than they get back. It is very easy to spend too much on a new kitchen.
I encourage Boston Fenway condo owners to look at pictures of homes in the neighborhood that have sold in the last couple of years. If the current kitchen is typical for the housing style and neighborhood it doesn’t need an upgrade to sell the house. If the kitchen is below average for the area and the housing style then an upgrade might be needed.
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Boston Downtown Real Estate: Renovations ROI {Infographic}
What are the best return on a Boston Condo investment (ROI) and which are the worst?
You may not have the budget for floor-to-ceiling renovations but that doesn’t mean you can’t still make a big difference to a home’s appearance. Interior designers from across the country respond to the question: What is your favorite summer design hack on a dime?
Here’s what they said:
1. Refresh the Color
“What works for summer—and all year round, really—is making a statement with color. A fresh coat of paint on the wall or repainting your furniture and adding new hardware offers a renewed look to any room. Don’t be afraid to try cool, summery colors; they create a tranquil mood to space.”
See full list here:
https://www.nar.realtor/blogs/styled-staged-sold/5-favorite-home-design-hacks-on-a-budget
Homelight
In the current sellers’ market, many homeowners wonder what, if anything, needs to be remodeled before they list their house. That’s where a trusted real estate professional comes in. They can help you think through today’s market conditions and how they impact what you should – and shouldn’t – renovate before selling.
Here are some considerations a professional will guide you through:
1. With current supply challenges, buyers may be willing to take on projects of their own.
A more balanced market typically sees a 6-month supply of homes for sale. Above that, and we’re in a buyers’ market. Below that, and we’re in a sellers’ market. According to a recent report by the National Association of Realtors (NAR), our current supply of homes for sale, while rising, still remains solidly in sellers’ market territory:
“Unsold inventory sits at a 2.6-month supply at the current sales pace, modestly up from May’s 2.5-month supply but down from 3.9 months in June 2020.”
So, what’s that mean for you? If you’re a seller trying to decide whether or not to renovate, this is especially important because it’s indicative of buyer behavior. When there aren’t enough homes for sale, buyers may be more willing to purchase a home that doesn’t meet all their needs and renovate it themselves later.
2. Not all renovation projects are equal.
You don’t want to spend time and money on a project that isn’t worth the cost or is too niche design-wise for some homebuyers. According to an article by Renofi.com, basing home updates on what’s trendy right now can be a costly mistake:
“The last thing you as a homeowner want to do is center your home design around a passing fad – even worse, one thats design quality won’t last a good while.”
Before making any decisions, talk to your real estate advisor. They have insight into what other sellers are doing before listing their homes and how buyers are reacting to those upgrades. Don’t spend the time and money to be trendy – if your buyer wants to upgrade to the newest fad later, they can.
3. If you’ve already made upgrades this past year, your agent can help spotlight them.
If you have already completed some renovations on your house, you’re not alone. The pandemic kept people at home last year, and during that time, many homeowners completed some home improvement projects. HomeAdvisor’s 2021 State of Home Spending Report found:
“35% of households that completed an improvement project undertook some type of interior painting, while 31% completed a bathroom remodel and 26% installed new flooring.”
Let your real estate professional know if you pall in this category. They can highlight any recent upgrades you’ve made in your house’s listing.
Updated: Boston Real Estate Blog 2024
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Boston Condos for Sale Bottom Line
When it comes to renovations, your return-on-investment should be top of mind. Let’s connect today to talk through any upgrades you’ve already made and to find out what you should prioritize before you sell to maximize your house’s potential.
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