A recent blog post titled: “Want to Increase Your Property Values? Try a Nuclear War” caught my attention. Robert Beckhusen & Matthew Gault, in their June 22nd post on Medium.com discussed a couple of unclassified defense reports on the effects and aftermath of a nuclear war (including the 1965 study “The Effects Of Nuclear Weapons On A Single City”).
They discovered that these reports were a morbid reminder of the consequences; one report stated: “In a macabre sense, the surviving population would be individually ‘wealthier’ than before the attack…” because surviving buildings would be more valuable and indirectly increasing the survivors’ per capita wealth.
These reports were speculative, and a conclusion could be that your home’s value could be tied to usability and location; homes in dense urban areas are expected to be valued more. However, as the 1965 report stated, “…any joy among the surviving population may be quite shortlived…” because there is no way to know if the surviving buildings and land are useable (due to radiation or other reasons).
As a means to increase your home’s value, nukes are not the answer. Accepted methods of adding value to your home include what you might expect: increasing the living space; adding a deck; improving the landscaping; updating the home’s systems; and renovating the kitchen and bathrooms. However, making home improvements do not always give you a dollar for dollar return; and some improvements could even detract from your home’s value too! Remodeling Magazine’s Cost vs. Value Report (costvsvalue.com) can give you an idea of the return on investment (ROI) for improvement projects.
The 2014 Cost vs. Value Report indicates that the top ROI for midrange projects in the Washington DC region include: installing a new steel entry door (125 percent); replacing the garage door (114 percent); adding a deck (112.3 percent); minor kitchen remodeling (99.9 percent); and installing new vinyl siding (99.2 percent).
The ROI on top upscale projects for the DC region include: installing new fiber-cement siding (123.9 percent); replacing the garage door (110.4 percent); installing foam backed vinyl siding (104.7 percent); installing new vinyl windows (96 percent); installing new wood windows (93.6 percent). Additional projects and descriptions with costs can be viewed in the Cost vs Value Report website.
You may notice that a project Cost vs Value ratio can sometimes exceed 100 percent (recouping more than was spent on the project at resale); this is sometimes attributed to an active housing market, and/or market trends. Overall average home values can affect Cost vs Value trends too. A higher ROI was realized at the peak of the housing market in 2005; and the subsequent decline was most probably due to devalued home prices. And as you might expect, ROI on many improvement projects have increased over the past year because appreciating home values. Also, regional and metro area differences exist on improvement project Cost vs Value ratios because of labor and materials costs. Some experts cite the abundance of workers seeking employment as a reason for decreased labor costs in some areas; while material costs for some projects may be similar, and other project materials are more expensive.
Another consideration when making home improvements is that the ROI and your home’s value can be affected by the quality of workmanship and installation. Hiring reputable and licensed contractors or builders who are familiar with the permitting process as well as building code requirements is always recommended.
Dan Krell is a Realtor® with Gerlach Real Estate, Inc. in Chevy Chase, MD. You can access more information at www.DanKrell.com.