(The cost-value ratio expresses resale value as a percentage of construction cost. When cost and value are equal, the ratio is 100%; when cost is higher than value, the ratio is less than 100%; when value is higher than cost, the ratio exceeds 100%.)
Significantly, for the first time in four years, improved resale value of residential housing had more of an influence in the cost-value ratio than construction costs. A modest 2.2% increase in average national construction costs was more than offset by an 11.5% improvement in average national resale value. This reverses a trend that began in 2010–11, when construction costs dropped dramatically, but resale values dropped even more, driving the ratio down. The situation began to change in 2013, when lower costs were mainly responsible for across-the-board improvement in the cost-value ratio. While this was good news for the remodeling market, costs remained volatile and housing values had yet to stabilize. In what is perhaps the most positive sign in this year’s data, rising resale value is driving the overall market improvement.
That said, replacements—especially door, window, and siding projects—once again outperformed larger discretionary remodeling projects, when judged solely by national ranking (see “ROI: Replacement vs. Remodeling”). Entry Door Replacement (steel) is once again ranked first, as has been the case since this project was introduced in the 2009–10 report, and is the only project to return more than 90% of cost (96.6%). Low initial cost combined with the positive effect on curb appeal is likely responsible for the high ranking. This is also true of the midrange and upscale versions of Garage Door Replacement, which ranked fifth and sixth, respectively.
At the next cost level, nine of the 14 projects with costs in the $5,000 to $25,000 range are also replacements. (Since the introduction of several low-cost projects to the survey, the Cost vs. Value Report has presented data in four cost categories, making for a better comparison among projects of similar size.) This includes all three Siding Replacement projects, led by Siding Replacement (fiber-cement), an “upscale” project ranked first in this category and second overall, with a cost-value ratio of 87.4% (a 10.2% improvement over 2013); and all four window replacement projects, led by wood and vinyl “midrange” projects with cost-value ratios of 79.3% and 78.7%, respectively.
Read entire article at http://www.remodeling.hw.net/cost-vs-value/2014/trends