A couple of weeks ago, this column explored the economic impact of real estate on local economies. Of particular interest was the segment on how much furniture and remodeling fit into the $118,500 impact each home sales have on the overall economy.  

According to the National Association of Realtors® (NAR) research, it’s $5,460 per sale, or 4.5% of the total. Obviously, that’s an average. Unfortunately, it likely understates the local effect. That’s due to the number of older homes in our region and the practice of new residents upgrading immediately, or soon after, the property closes. 

NAR’s 2024 Remodeling Impact Report offers insights that can put individual jobs in perspective for real estate professionals and consumers. It analyzes the most common jobs, including why people decide to remodel, the general costs of specific remodeling tasks, and the fulfillment experienced.  

Projects that made the renovators want to remain home or remodel jobs also get a Joy Score. It measures the enjoyment the project provides. Ten is the perfect Joy Score. Some tasks that were awarded scores were: 

• Painting a home’s entire interior. 
• Painting one room. 
• Adding a home office. 
• Hardwood floor refinishing. 
•  Closet renovation. 
• Insulation upgrades. 

Hardwood floor refinishing also received a 10 Joy Score because the homeowner’s felt happiness and satisfaction in their home after undertaking the upgrade. Sixty-four percent of those polled answered that they have an increased sense of enjoyment when they are at home now that their hardwood flooring is installed. Another 64% said just thinking about the completed project gives them a “major sense of accomplishment.” 

Adding a new home office is another task that earned a perfect Joy Score. Ninety-one percent of consumers said they have a greater desire to be home now that their office is in place. Seventy-three percent said they have an increased sense of enjoyment when they are home. 

Cost recovery on some upgrades and remodeling projects is not an issue. For others, it’s very much an issue. Here’s the 2024 cost recovery items from NAR’s report: 

• Roofing – 100% 
• Garage Door – 100% 
• Fiber Cement Siding – 86% 
• Vinyl Siding – 82% 
• Vinyl Windows – 67% 
• Wood Windows – 63% 
• Steel Front Door – 63% 
• Fiber Glass Front Door – 60% 

And what about the joy scores for the typical projects? 

• Paint Exterior Siding – 9.8. 
• Vinyl and Wood Windows – 9.6. 
• Steel and Fiberglass Door – 9.5. 
• Roofing – 9.2. 
• Garage Door – 9. 
• Vinyl and Fiber Cement Siding – 7.9. 

The report also offers an estimate of the likely dollar value each project would add to a house during resale. In comparing that dollar value to the estimated job cost, the National Association of the Remodeling industry added its expertise. 

The highest percentage cost recovered was from refinishing hardwood floors at 147%. The new wood flooring was 118%, and the insulation upgrade was 100%. Among exterior projects, new roofing and a new garage door both recovered 100% of the project costs. 

• Kitchen upgrades were also popular among homeowners, with the task receiving a 9.8 Joy Score. The top reason (32%) to take on a kitchen overhaul was the desire to upgrade worn out surfaces, finishes, or materials. The second top reason (20%) was to add features and improve livability. 
• According to NARI remodelers’ cost estimate, the average kitchen remodel would be about $45,000. Realtors® estimated that $30,000 of that sum could be recovered as a result of the renovation. That would be a 67% recovery rate. 

There’s good and bad news about remodeling this year. According to Harvard University’s 2024 Remodeling Futures Program, spending on improvements and repairs to owner-occupied homes is expected to decline this year. The good news is that estimated downturn can be muted by real estate professionals and consumers with a solid understanding of what’s happening, and what’s expected from projects. That’s where the NAR report comes into play.