Home Improvement: Does it ad value?

This video from the Today Show is a couple of year’s old, but it is still interesting and relevant for today.

Home Improvement: Does it ad value?

Remodeling in 2010

Because of the recent release of the cost vs. value report there have been several interesting articles about remodeling in the national media.  This one from MSN real estate is the best I have seen.

Excerpt from MSN….

Basic replacements rule
As a group, low-cost replacements — new siding, windows, doors and roofing — deliver the best bang for the buck now, a considerably better payback than from a two-story remodel or a kitchen remodel.

Given great improvements in materials, you can replace your inefficient 10- or 15-year-old products with highly efficient ones for a decent return when you sell. In addition, the improvements help you save on heating and cooling bills. Replacing leaky windows with highly efficient newer ones is a good example. The technology behind the glass and frames has so improved that you’re tightening up your home’s weatherproofing in the process. You get more comfort and, from the real-estate agent’s point of view, new windows show off your house from the street.

Replacement projects included in the Cost vs. Value survey all cost less than $20,000 and most cost considerably less. They instantly enhance curb appeal, boosting a home’s marketability, and they require little maintenance once installed. A bonus: Most of these replacements qualify for a federal tax credit for energy efficiency (not included in Remodeling Magazine’s ROI calculations).

See detailed project descriptions here.

1. Replace the front door.

• The absolute best return on the money of any of the projects surveyed — 129% of cost — is gained by replacing a beat-up front door with a $1,200 steel-shell door filled with foam insulation.
• A new fiberglass door (more expensive, at $3,490) returns less, about 65%. (Fiberglass is the new chic building material because it’s rugged and durable, can be painted and will mimic almost any wood. Unlike wood, it doesn’t crack, warp or shrink and needs zero maintenance.)
• Spend about $7,500 on an entire new entrance, including a widened opening, a solid-core wood door and high-end glass, new lighting and better locks, and you’ll recoup 69%, on average.

2. Replace home siding

• Replacing old siding with a durable fiber-cement product ($13,287) recoups about 84% at resale.
• Use vinyl siding ($10,607) to get an 80% return.
• Foam-backed vinyl ($13,022) costs more and earns back less — roughly 79% — but it is much more efficient at insulating a home.

3. Replace windows. Three of the four window-replacement projects considered in the survey pay back about 77%:

• Wood-trimmed windows ($11,700).
• Lower-end vinyl windows ($10,728).
• Windows trimmed in higher-end vinyl ($13,862).
• The fourth project, higher-end wood-replacement windows ($17,816), has a return of about 72%. Fiberglass windows weren’t included in the study.

Replace the roofing: Spend $19,731 on new fiberglass asphalt shingles and you’re likely to recoup about 67% of the cost.

• A higher-end roof replacement using standing-seam metal ($37,359) pays back about 61% of the cost, agents told the survey.

Additions aren’t cost-effective
Except for a new deck, which pays back nicely, adding to a home’s footprint brings a poor return these days.

A new deck

• Wood is high-maintenance, but homebuyers love it: A new wood deck ($10,634) returns 81%.
• A new deck of midrange composite planks ($15,373) returns around 71% of the cost at resale.
• A higher-grade composite ($37,745) brings an ROI of about 61%.

Other additions

• Adding a 200-square-foot sunroom ($73,167) recoups 51%.
• A high-end ($225,995) master suite project, adding 640 square feet to the house, including a bath with walk-in shower and stone walls, brings a 56% return.
• A less ambitious, less costly ($103,696), 640-square-foot master suite addition including whirlpool bath and ceramic tile recoups 65%.
• A garage addition ($87,230) earns back about 56%.
• A high-end bathroom addition ($75,812) earns about 58% at resale.
• Adding a midrange, 6-by-8-foot full bath ($39,046) recoups about 60%.
• Add a midrange two-story wing ($156,309) to the house, including 24-by-16-foot first-floor family room and second-floor bedroom and full bath, for a return of about 69%.
• A midrange family room addition ($82,756) returns around 65% of the cost.
• Adding a sunroom or home office were the projects that yielded the least payback, presumably because these special-purpose rooms appeal to fewer buyers and are in less demand.

Best use of the money (besides replacements)
Upgrading existing space is the best bet for recouping cost. It makes sense: Pouring a foundation, framing a structure and bringing in electricity and plumbing are among the most expensive aspects of a building project. When you can largely skip these steps and increase your usable space, the payback is richer:

• An attic conversion, including a 15-by-15-foot bedroom with dormer and a 5-by-7-foot bath with shower ($49,346) returns comparative gold: 83% return, on average. Agents in several cities said this job would return more than 100%.
• A basement ($62,067) remodel —a 20-by-30-foot entertainment room and 5-by-8-foot full bath — recoups about 75% of its cost.
• A midrange 5-by-7-foot bathroom remodel ($16,142) with standard fixtures and trim has a 71% ROI.
• Expanding that bathroom to 100 square feet ($52,295), including moving plumbing and wiring and adding higher-end cabinets and fixtures, brings a 62% ROI.

Kitchens and baths: Scaled back but ever popular
High-end kitchens and baths are fading in popularity, replaced by “very practical things,” Michelson says. “The $400,000 and $500,000 jobs are few and far between. The jobs between $50,000 and $200,000, we’re doing lots of those.”

Kitchen and bath remodeling hasn’t stopped, since these projects maximize the enjoyment of the most-used spaces in a home. But “people are definitely being smarter with their money,” Conneely says. “For instance, a $75,000 remodel five years ago? That same client would today spend $50,000.” People who blithely bought the best of everything now pursue the same look by choosing materials judiciously.

• A minor kitchen upgrade ($21,411) installing new cabinet fronts, laminate counters and other cosmetic improvements is a decent investment, at 78% ROI.
• A major kitchen remodel ($57,215) using midrange materials — semi-custom cabinets and laminate counters — pays back about 72%.
• A high-end major kitchen remodel ($111,794) with top-of-the-line cherry cabinets, stone counters, glass backsplash and expensive, built-in appliances, pays back just 63%.

Curb Appeal Is King

Remodeling Magazine, by Jim Cory

Why are seven of the top 10 value-yielding projects of the 33 projects ranked by Realtors in this year’s Cost vs. Value Report exterior projects?

Lots of reasons, the first of them being cost. In an economy where frugal is the word, each of the exterior projects comes in at less than $15,000. The project with the greatest return — a mid-price–point entry door — costs less than $1,200.

Another reason is appearance. Exterior improvements contribute to the overall look and feel of a building. “Curb appeal is king,” notes Strongsville, Ohio, Realtor Mike Pallendino — especially in a market with more sellers than buyers. Pallendino says that sometimes when he pulls up to a house that has a less-than-stellar exterior, clients ask him to just keep driving. “With the exterior updated,” he points out, “owners can concentrate on other parts of making the house their home.”

The ‘F’ Word

With home prices lower than they were a few years ago, and home equity tapped out for many consumers, function trumps glitz. “Three or four years ago, a $50,000 or $100,000 kitchen was a sensible investment,” says Kermit Baker, director of the Joint Center for Housing Studies of Harvard University, “because housing prices were increasing 6%, 8%, or 10% a year. So you were adding to the value and letting the equity build up.”

This year the Joint Center sees the total number of improvements (i.e., jobs) down 9% and overall remodeling expenditure down 3.5% to 4.5%.

Fewer projects means that those projects that just can’t wait get done. The projects that can wait — that are discretionary — often are postponed. That’s why total spending on “Improvements” (additions and alterations) was down while “Maintenance and Repairs” spending was up in 2007, the last year that the U.S. Census Bureau broke remodeling sales out in those categories.

Energized

Another big reason for the popularity of exterior replacements is energy efficiency. Not so important before. Definitely important now. Chalk some of that up to the American Recovery and Reinvestment Act tax credits available for energy-efficiency upgrades, including qualified roof and window components. That has helped boost homeowners’ — both buyers’ and sellers’ — awareness of such improvements. Some potential home buyers not only want a good-looking house, they want an energy efficient one, notes La Crosse, Wis., Realtor Kathy Fox. Clients, says St. Louis broker Dawn Griffin, are “willing to pay a little bit more if the house has new and energy-efficient windows.”

That’s because homeowners are now more aware of the fact that those windows or that siding can save them money in the long run by offsetting energy costs. The U.S. Department of Energy says that qualified (dual- or triple-paned) windows can save as much as 15% to 20% on energy bills. Foam-backed siding provides a modest boost in R-value as well as reduced sound transmission. Homeowners are drawn to improvements that help reduce the cost of maintaining the home over time. They are, Pallendino says, “more aware, these days, of the saving aspects” available through upgraded windows or a new HVAC system. But those functional improvements are “still not high on the list of must-haves.”

Turnkey Is Key

What is high up on that list is move-in condition. In a booming real estate market, marginal locations move because buyers are willing to invest the time and money into customizing. They think of the investment as part of the long-term cost of the transaction. In lean times, the opposite psychology holds sway. Marginally maintained houses get house hunters’ short shrift.

Bill Gassett ought to know. The Hopkinton, Mass., market where he has sold homes for 25 years hit its pricing peak in 2005 and is down about 25% since that time.

“The houses that get most significantly hurt by the market,” Gassett says, “are the ones that haven’t been cared for.”

Turnkey is what a house has to be these days to sell. In St. Louis, Griffin recently went into a home that had just come on the market. Price: $80,000. The house was old and the kitchen hadn’t been updated since the ’70s, she says. But though it wasn’t stylish, what it did have going for it was that the owner had maintained it well. “It was super well-kept,” Griffin says. “Roof in great shape. Gutters in great shape. And,” she adds, “that house was under contract in three days.”

Before and After: English Arts and Crafts Dream

After

Before

 

COOPER Designbuilders
Phone: 503-282-0545
www.cooperdesignbuilders.com

 

This West Linn house was completely transformed from an existing 2780 square feet one-story ranch with a daylight basement into an exquisite 4414 square footage English Arts and Crafts dream home.   

We removed the main floor and built two new floors on top of the existing basement.  The entry has an old world tile mosaic inlaid in Brazilian cherry hardwood floors below a glass coup chandelier. Art niches move the eye down the hall into the great room where two-story windows flood the room with light. At the fireplace small rectangular slate mosaic tiles are interspersed with opaque glass in shades of grey, green, and rust.

Wood columns atop double-sided cabinetry create an entrance from the great room into the dining area where another wall of windows captures the incredible view. A nine-foot cherry island used for seating, serving, and cooking separates the dining room from the large, well-appointed gourmet kitchen. Subtle cream colored subway tiles accented with a green opaque glass tile liner form the backsplash between cherry cabinets and antique honed black granite. 

Two-master suites, one on each floor, focus on individual comfort and personal aesthetic. The main floor master bath has a neo-classical touch with a modern interpretation, while the second floor master bath is contemporary and minimal.

The basement includes a family room, laundry/craft room, two bedrooms, and a sunroom surrounded by glass. Tile, a main feature in this home, is at its most creative in the basement bath. Multi-sized, multi-colored circles are set in linear strips within travertine tile. This pattern is carried throughout the room at the vanity backsplash, dog wash, and in the shower.

While stately in scope, the whimsical nature of the design lends an entirely unique quality to this superb home.

Before and After: Preserving a century-old home’s original charm

by Bridget A. Otto, The Oregonian  - read story and see more pictures

Motoya Nakamura/The Oregonian

 

This closed-in porch, originally an open balcony, remains a charming perch.It took only three days for Maria and Jim Bruce to sell their longtime family home in the settled Southwest hills of Portland.

That was a few years ago, mind you.

Nonetheless, toying with the idea of downsizing a bit and moving closer to the action of the city went from romantic notion to reality faster than the Chilean-born and -raised Maria tells a story.

To test the waters of this change, the Bruces rented half of an old house on Northwest Overton Street that had been remodeled into a duplex.

“We loved it,” Maria says, her eyes still sparkling over the success of the leap of faith they took almost five years ago.

Jim created a master suite by turning one of the upstairs bedrooms into a bathroom. She loves it even more now that they’ve bought and renovated a classic house in the area, this one just within the border of Northwest Portland’s Alphabet Historic District.

“We didn’t want to live in a huge house nor in a tiny house, because I have four sons and have all this stuff that my kids do not want, of course,” Maria says, waving her hands around her immaculate home filled with Oriental rugs, original paintings and exquisite furnishings gathered over the years.

And since only one son still lives at home — when not studying at Arizona State University — Jim, owner of JB Construction Services, was able to reconfigure the old home’s five bedrooms into space that fits their lifestyle.

One of the five bedrooms was converted into a laundry room with plenty of natural light, storage and room to house toys for the Bruces’ granddaughter; another bedroom was made into a bathroom, creating a master suite.

When Maria came across the four-story house (including basement and attic), it had sat empty for five years, she says.

Empty, however, is a bit of a joke.

The home wasn’t occupied, but it was chock-full of belongings from the two sisters who had lived there for more than 60 years.

The sisters’ uncle built the home in 1901 and lived there for about 40 years before giving it to his nieces, who were identical twins. When the married sister and her husband moved into the house, they brought the other sister with them. The husband died, but the sisters remained in the house.

There were never any children. “That is why the wood is in such good shape,” Maria says.

Gleaming doors, window casings, picture rails and moldings frame and accentuate nearly every room. An immense pocket door divides the living and dining rooms, and a gorgeously turned railing lines the stairway.

Motoya Nakamura/The Oregonian

The Bruces’ furnishings harmonize beautifully with the stately dining room, positioned in the front of the house looking out at Northwest Lovejoy Street. The kitchen is through the opening on the right.When Maria found the house, a relative of the sisters had spent three years slowly cleaning it out. He told Maria he was not ready to put it on the market, but he was willing to let Jim walk through.

Jim, who has been in construction and remodeling for decades, knows a gem from coal on sight.

“Age,” he says, “is not a problem. But if the casings and woodwork are beat up or painted, then you get into taking them apart, cataloging the pieces and warehousing them while you work.”

That, Jim says, can add as much as 50 percent to the cost of the remodel. And, he says, it never looks the same when put back together.

In this case, it was obvious that the woodwork needed to be stripped, but nothing needed to be torn down.

Jim and Maria also agreed that they loved the old character of the house. They wanted to embrace it, not erase it.

Strips of molding are both decorative and functional: They have kept the corners of the upstairs plaster walls protected from years of bumps and nicks. Preserving while updating

The lath-and-plaster ceilings, however, were in need of more help.

Jim says they decided to hack into the ceilings throughout the entire house, creating trenches there and in the tops of the walls down to the picture rails. This eased installation of new wiring and plumbing. They ended up with new drywall ceilings and walls down to the picture rails, with the lath-and-plaster left intact below. The original lath-and-plaster walls were simply repainted.

The Bruces had the floors (some of which are inlaid with mahogany) redone, and pretty soon the sisters’ house began to look like the gracious lady it was meant to be.

For now, Maria has turned a sunny corner of the kitchen into the dining nook. She has plans to add an island to the kitchen, which was redone in the 1950s. The Bruces reworked some of the cabinetry and put in a new Marmoleum floor. “We wanted to keep the house with the feeling of an old house,” Maria says, sitting in the dining room drenched in daylight from the enormous street-side windows. “I didn’t want to paint the wood. … Jim liked it this way too. Keep it old,” she says, adding that if she had wanted something new, they would have explored the Pearl.

Off one of the bedrooms upstairs is a little closed-in porch. A 1915 picture of the house shows that the porch was originally an open balcony. It remains a delightful perch with windows that open wide.

“Isn’t it sweet?” Maria says, standing two stories above Lovejoy watching the neighborhood go by. “I love that.”

In Maria’s words, their work “turned out pretty good.” They succeeded in salvaging an old gem, embracing its age and character.

“You don’t see very many houses that are this original,” Maria says.

“This house feels old — a good old. I like old things.”

Tour of Remodeled Homes: SLS Custom Homes

Tour of Remodeled Homes starts tomorrow…buy tickets now!

Tour of Remodeled Homes

Tom Kelly Awarded Lifetime Achievement Award

Members of the Home Builders Association and Remodelers Council of Metropoltian Portland gathered this week to award Tom Kelly of Neil Kelly Design/Build Remodeling the prestigious Building Excellence Lifetime Achievement Award.

Tom Kelly’s influence on housing, the remodeling industry, and communities and people in general is amazing. In 1980, he took over the operations of a successful remodeling company founded by his dad, who was also a legendary remodeling and housing pioneer in our region. He’s built that into one of the most well-known and successful remodeling businesses, not just in Portland, or even Oregon, but in the entire Country.

Tom’s not shy about taking action, especially if he thinks there needs to be a better vehicle built for working on industry issues. He was one of the founders of HBA’s Remodelers Council – making sure the Home Builders Association had a strong venue for promoting, representing and advancing this fast growing segment of the construction industry. He also is a founder of the Oregon Business Association, which started just a few years ago when Tom and other business leaders felt a different approach was needed to represent business at the legislative level. OBA now has over 300 of Oregon’s top businesses as members.

He was green before green had a color. His company has done more to innovate and adopt green building practices and the use of sustainable building materials than probably any in our region. In 1997, his firm embraced the principles of the Natural Step – a way of approaching business that reduces environmental impact and increases efficiency. In 2006, he built a net zero energy home, which actually produces more energy than it uses. It was awarded the first LEED for home silver certification in the west coast. Tom doesn’t rest on his laurels, nor is he afraid of making change. He took what was already a successful local remodeling company and has expanded it to help diversify its business. The company now also has a home repair division, a custom home division, a home performance division and an environmentally friendly cabinet company.

But no review of Tom’s accomplishments and contributions, no matter how succinct, would be complete without mentioning his heart for Oregon’s communities and others less fortunate. Tom’s support and involvement goes to a wide variety of educational, environmental, and social service organizations including groups such as the Portland Children’s Museum, Volunteers of America, Providence Medical Foundation, the Oregon Solutions Project, Children’s Cancer Association, Columbia Riverkeeper, EarthShare and the Albina Rotary Neil Kelly Memorial Scholarship Fund. And he’s continued his company’s 30 year active participation in Loaves and Fishes / Meals on Wheels, serving on the Board and chairing its fundraising committee. For ultimately, Tom combines a strong spirit of pioneering and progress built on the respect for the legacy his father established.

2008 Remodeling Excellence Awards

The Remodelers Council of Metropolitan Portland is pleased to announce the 2008 Remodeling Excellence Award winners. Sponsored by Contract Furnishing Mart/ Stainmaster Carpets, the Remodeling Excellence Awards recognize outstanding work throughout the remodeling industry.

“It is important that we take some time each year to applaud the individuals and companies who lead our industry though their efforts,” said Steve Frazier of Contract Furnishings Mart. “We were proud to have so many difficult decisions to make while judging submissions. The Portland area’s remodeling industry is home to some amazing talent and some outstanding professionals.”

Remodeler of the Year: Scott Gregor, President of Master Plan Remodeling With 36 years experience, Scott Gregor has assembled a team of experts that consistently create award-winning remodels for Portland/Vancouver homeowners. Master Plan provides complete in-house design services and Wood-Mode Cabinetry. Ten years ago, Scott joined other remodeling industry leaders like Tom Kelly, Lee Zajic, Lora Creswick and David Ewing to help found the HBA Remodelers Council. Through the years the Remodelers Council has continued to grow and is now the third largest Remodelers Council in the United States. Scott cares passionately about his work, his family, his integrity and his customers. He brings that passion to his leadership in the RC. As the old saying goes, iron sharpens iron, and Scott brings his high standards and drive to help push the RC and the HBA to excel.

Trade Contractor of the Year: Quadrant Systems Quadrant Systems has been in business for twenty years and its owner, Gary Nedelisky, is a long-time supporter of our industry and the HBA. Quadrant has been an HBA member for over eight years and is also an active member of the Remodelers Council. The company has supported builders in the Street of Dreams for over 15 years and has also contributed auction items to the Home Builders Foundation.

Other Excellence Award Winners:

Whole House Remodel Under $250,000  Highland Ridge Custom Home Remodeling

Whole House Remodel $250,000-$499,999  Cascade Restoration & Remodeling

Whole House Remodel $500,000-$999,999 BC Custom Homes Corp.

Whole House Remodel over $1,000,000  Metke Remodeling and Woodworking

Kitchen Remodel Under $100,000  Craftsman Design & Renovation

Kitchen Remodel $100,000 and above  Neil Kelly Design/Build Remodeling

Bathroom Remodel under $50,000  Metke Remodeling and Woodworking

Bathroom Remodel $50,000 and above  Yalecrest Homes

Master Suite Remodel  Cascade Restoration & Remodeling

Exterior/ Outdoor Living/ Deck Remodel  Metke Remodeling and Woodworking

Open Category  Neil Kelly Design/Build Remodeling

Interior Design and Project Designers

Residential Bath Design  Fuller Spaces

Residential Kitchen Design  Paolo Design Group

Residential Whole House Design  Z-3 Design Studio Inc.

Before and After: Open living space

AFTER

BEFORE

Irving Development
Whole House Remodel
www.irvingdevelopment.com

A 1900-foot addition and whole house remodel completely transformed this 1980’s colonial style home. The homeowners worked with Irving’s design team to achieve their desire to open up the kitchen/ living area, add more bedrooms, and create a designated pantry/laundry/mud room.

A beautiful transformation of the family living area highlights this remodel. Large open spans were achieved using numerous steel beams, creating a fantastic living and entertaining area.  The kitchen, entertainment room, formal dining room, wet bar and small office are all incorporated into this area. Custom cabinetry, using a combination of paint and stain, were used in the kitchen and the entire living area.  Oak flooring with a walnut stain runs throughout the lower level adding a rich contrast. Granite counter tops, tile backsplash and commercial grade appliances were used in the kitchen. A natural stone fireplace enhances the large living area. Ten-foot knotty alder sliding doors lead from this area to the outdoor entertainment patio added to the newly landscaped back yard.

The stairs leading to the second level were reconfigured to increase the size of the foyer and a new library and office, with numerous built-ins, are on each side of the entry. A custom metal handrail leads up the stairs to the second floor. The second level now has four bedrooms, three baths, a study loft and an entertainment room with full bar, pool and card tables.