Lots of Good News for Home Remodeling
By Phil Wengerd
Recently we learned that four of ProVia’s key product lines – entry doors, replacement windows, vinyl siding and insulated siding – are named “best remodeling projects for maximum return on investment” in the 2014 Cost vs. Value Report released by Hanley Wood’s REMODELING magazine. In this report they measure the percentage of the cost of home remodeling projects (“Cost”) that is recouped in resale value (“Value”). The numbers shown in this report are averages from 101 markets across the U.S.
Of course we’re always glad to know we’re right in the middle of a sweet spot in the market. But I’m not here to bore you with the details of why this is good for ProVia. However, I do want to share just a few of the headlines, because there’s a whole lot of good news in here for everyone – including homeowners, contractors and dealers.
Here are the key takeaways I see from the report. There may be some “news you can use” in here!
- The Trend is Continuing in the Right Direction. For the second year in a row, all product categories have gone up. By “gone up” we mean that a higher percentage of the money that is invested in a home remodeling project is recouped in the home’s resale value (in comparison to the prior year). From a big-picture economics standpoint, this is very encouraging news.
- What Does This Mean for the Homeowner? Buyer’s confidence is continuing to grow. This means that people can have more confidence that if they invest in their home, and put some money in to upgrade it, this is a safer move because the market is increasingly valuing home remodeling projects.
- Survey Says…Put a New 20-Gauge Steel Entry Door On Your House! If you look at the data it tells you – the first and foremost thing you should do if you want to invest in your home is put in a new 20-gauge steel entry door. Steel entry doors actually came in #1 in the survey (with a whopping 96.6% Cost-Value, as you can see in Figure 1). What this says to me is there’s a high value for curb appeal. And since doors rank so high overall in the survey (fiberglass entry doors were a top performer too, with a 70.8% Cost-Value) this speaks to me about the connection that homeowners have with their front entryway. People really want to have an entry with an inviting look, and this shows up in resale value. And when you compare the cost of an entry door with the other projects on this list, it’s a relatively low dollar amount to put back into your house, while gaining significant resale value.
Figure 1: The #1 performer out of 35 categories is Entry Door Replacement (Steel), at 96.6% Cost-Value.
2014 Cost vs. Value Report (from Hanley Wood’s REMODELING magazine)
- Fiberglass Entry Doors Are Coming On Strong While steel entry doors have consistently topped the list, fiberglass entry doors have actually been growing at a faster pace. This tells me that people are valuing the features and benefits of a fiberglass door more than they used to. We also see this trajectory of growth in an increase in sales for ProVia’s fiberglass doors. Steel is remaining strong and steady, but fiberglass is expanding faster.
- Vinyl Siding and Insulated Vinyl Siding Continue Their Steady Climb While historically fiber cement has been a strong market contender, I think awareness is growing that there’s maintenance that needs to be done with this product. So I think we’ll continue to see a shift toward truly maintenance-free products vinyl siding and insulated vinyl siding. Our lives are too busy, we don’t want to hassle with taking care of something year after year. We want to put something on our house that’s going to last.
- Replacement Windows Are a Bellwether Product Replacement windows have also experienced a nice rise over the past couple of years. I attribute that to economic conditions – the overall market seems to be strengthening.
- High-ROI Leading the list of High-ROI projects is entry door replacement (steel), which topped 100% in 38 cities. Because there are 101 cities in this survey, this means that in 38% of locations nationwide, you get every dollar back on a steel entry door replacement.
- Mid-Range vs. Upscale Projects Home remodeling projects priced in the Mid-Range improved 10.6% versus 8.8% for those that are priced in the Upscale category. This was somewhat surprising to me, but it’s probably an indicator that more people with mid-range budgets are getting back into the market. This could be telling us something about how the market is recovering. I find this to be a very healthy indicator, because if only the very wealthy are putting money back into their homes, that would not be good. But the real power of the market is when there are more mid-range projects happening, because there’s a higher quantity of mid-range folks.
Even Better News Than You May Think
For the second consecutive year, all home remodeling projects have gone up in Cost-Value. But for the first time in four years, improved resale value of residential housing has more of an influence on the Cost vs. Value than the project cost itself. The 2.2% increase in project costs were more than offset by the 11.5% improvement in average national resale value. (This means that costs have only increased by 2.2% but the resale value has jumped by 11.5%.) That’s a significant spread. I don’t think most people are aware that the market is growing this strongly. We tend to have a general feel that the market is getting better, but most people don’t realize that it’s really this good. This further supports the idea that people can invest with confidence.
Great news and lots of upside here for all of us! What do you think? What are you seeing in your market? Please comment below and share your thoughts.
This info has some surprise, but it is a given that these types of projects have the best outcome for the value.
The news from the new Cost. v. Value is indeed wonderful! As far as the entry doors, I don't like to point to the report because the project cost for the past several years has been significantly lower than what the real cost is for a Provia door solution in the DC market. Can you offer any suggestions on how this report can be more of a help to us in the home when offering Provia as the best solution for the homeowner?