Texas Remodel Valuation Report Contact · 2016-07-13 · Texas Remodel Valuation Report Contact:...

Texas Remodel Valuation Report 2016 Edition Release date: April 1, 2016

About the Texas Remodel Valuation Report The Texas Remodel Valuation Report is based on data from the 2016 Cost vs. Value Report by the National Association of REALTORS® and Remodeling magazine. The Texas Association of REALTORS® distributes insights about the Texas housing market each month, including quarterly market statistics, trends among homebuyers and sellers, luxury home sales, international trends, and more. To view the Texas Remodel Valuation Report in its entirety, visit TexasRealEstate.com.

About the Texas Association of REALTORS® With more than 100,000 members, the Texas Association of REALTORS® is a professional membership organization that represents all aspects of real estate in Texas. We advocate on behalf of Texas REALTORS® and private-property owners to keep homeownership affordable, protect private-property rights, and promote public policies that benefit homeowners. Visit TexasRealEstate.com to learn more.

Contact: Danielle Urban Pierpont Communications 512-448-4950 [email protected]

Texas Remodel Valuation Report April 2016

2TexasRealEstate.com Source: 2016 Cost vs. Value Report by the National Association of REALTORS® and Remodeling magazine

Executive Summary Remodeling projects continue to be popular and profitable in Texas. A growing number of Texas homebuyers prefer to buy a lower-priced home and remodel it to suit their exact needs or make the home more energy efficient. More and more Texas homesellers are also seeing the value in investing in a few strategically chosen projects before listing to sell their home faster and potentially at a higher price. Both nationally and in Texas’s six major markets, one or more remodeling projects recouped 100 percent or more of project costs in 2015. Home remodeling projects in Houston, McAllen, and El Paso showed the highest year-over-year growth in profitability, while a majority of remodeling projects in Austin, San Antonio, and Dallas declined slightly in profitability from 2014 to 2015. In 2015, the most popular home remodeling projects in Texas’s major markets were those that increased a home’s sustainability or functionality. This includes increasing a home’s curb appeal or energy efficiency. Fiberglass attic insulation ranked among the top five projects in most markets, recouping up to 163.4 percent of project costs. Manufactured stone veneer projects were also popular across Texas, recouping up to 157.9 percent of project costs. Unlike in previous reports, remodeling projects that maximized a home’s existing square footage were among the least profitable projects in 2015. Bathroom, deck, and master suite additions consistently ranked among the least in markets nationally and in Texas, recouping as little as 25.5 percent of project costs. In general, upscale or luxury projects continue to be less profitable than smaller or mid-level projects. There are many factors that go into whether a remodeling project is a good fit for a home in addition to impact on resale value, such as the homeowner’s expected tenure in the house and, for energy-efficient upgrades, how long it will take the project to pay for itself in cost savings. Texas REALTORS® can help homeowners, buyers, and sellers determine which remodeling projects are the best fits for the short term as well as further down the road.



Market-Wide Trends Both nationally and in Texas, the top home remodeling projects in 2015 were those that increased the functionality and sustainability of the home, by improving either a home’s curb appeal or energy efficiency.

• Fiberglass attic insulation, a popular option for increasing a home’s energy efficiency, ranked among the top five most

profitable projects nationwide, in the West South Central U.S., and in Austin, Dallas, El Paso, Houston, San Antonio, and McAllen, Texas. Fiberglass attic insulation recouped up to 163.4 percent of the total project cost.

• Manufactured stone veneer, a lower-cost alternative for siding, fireplaces, and other stone projects, ranked among the

top five most profitable projects in all Texas markets with the exception of Houston. Manufactured stone veneer projects recouped up to 157.9 percent of the total project cost.

• Garage door replacements, one of the easiest ways to quickly boost a home’s curb appeal, ranked among the top five

most profitable projects nationwide, in the West South Central U.S., and in Austin, Dallas, El Paso, Houston, and San Antonio. Garage door replacements recouped up to 112.1 percent of the total project cost.

• Steel entry door replacements, a frequently popular project in Texas Remodel Valuation Reports, continued to be a

highly profitable project across most all markets, recouping up to 163.1 percent of the total project cost.



Market-Wide Trends, continued Unlike in previous Texas Remodel Valuation Reports, projects that added livable square footage to a home were among the least profitable projects in 2015. Luxury or upscale remodeling projects continued to be among the least profitable projects for the third year in a row.

• Bathroom additions and/or remodeling projects of all sizes ranked among the least profitable projects in all markets except McAllen. Bathroom remodels and additions recouped as little as 25.5 percent and 28.8 percent of total project costs, respectively.

• Deck additions, whether constructed from composite materials or wood, were ranked among the five least-profitable

projects in all markets. Deck additions recouped as little as 28.6 percent of the total project cost.

• Master suite additions, consistently ranked among the least profitable home remodeling projects each year, were again among the five least profitable projects in Austin, El Paso, Houston, and San Antonio as well as in the West South Central U.S. and nationally. Master suite additions recouped as little as 25.8 percent of the total project cost.

• Backup power generators, one of the most profitable home remodeling projects nationally and in multiple Texas

markets for the past two years, saw significant decreases in profitability in 2015. The installation of backup power generators recouped as little as 49.7 percent of the total project cost.



Nationwide

Nationally, the profitability of home remodeling projects remained on pace with prior reports, with roughly half of the remodeling projects studied showing losses in recoup cost in 2015.

• Fiberglass attic insulation was the most profitable project nationwide, recouping 116.9 percent ($1,482) of the total project cost. Because this project category was added in 2015, historical comparisons are not available.

• Fiberglass entry door replacements showed the highest annual gain in recoup cost in 2015. The recoup cost increased 10 percentage points year-over-year to recoup 82.3 percent ($2,574) of the total project cost.

• The five most profitable projects recouped an average 96.5 percent of the total project cost – 6.0 percentage points more than 2014. The five projects with the highest growth in recoup costs increased an average of 6.1 percentage points year over year, compared to an average year-over-year increase of 2.6 percentage points in 2014.



Nationwide, continued

• Midrange bathroom additions were the least profitable project, recouping 56.2 percent ($23,727) of the total project cost. This is a 1.6 percentage point decline in recoup cost from 2014.

• Steel entry door replacements, while still mostly profitable, showed the largest decline in recoup cost from 2014 to 2015. Recoup cost dropped 10.7 percentage points year-over-year to 91.1 percent ($1,217) of the total project cost.

• The five least profitable projects recouped an average 57 percent of the total project cost – 4.4 percentage points more

than 2014. The five projects with biggest decline in recoup costs decreased an average of 7.7 percentage points year over year, compared to an average year-over-year decline in recoup costs of 7.1 percentage points in 2014.

• The five most profitable projects recouped an average 96.5 percent of the total project cost – six percentage points more than 2014. The five projects with the highest growth in recoup costs increased an average 6.1 percentage points year-over-year, compared to an average annual gain of 2.6 percentage points for the top five projects in 2014.

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West South Central U.S. Home remodeling projects in the West South Central U.S. were also less profitable in 2015 compared

to 2014, with recoup costs ranging between 55 percent and 122.6 percent.

• Fiberglass attic insulations were the most profitable project, recouping 122.6 percent ($1,505) of the total project cost. Because this project category was added in 2015, historical comparisons are not available.

• Midrange garage door replacements – last year the project with the highest year-over-year increase in recoup costs – once again showed the highest year-over-year gain in recoup cost in 2015. The recoup cost increased 14.7 percentage points year-over-year to recoup 100.7 percent ($1,544) of the total project cost.

• The five most profitable projects recouped an average 99.8 percent of the total project cost – 10.3 percentage points

more than 2014. The five projects with highest growth in recoup costs increased an average of 7.5 percentage points, compared to an average year-over-year increase of 4.9 percentage points in 2014.



West South Central U.S., continued

• Upscale composite deck additions were the least profitable project, recouping 55 percent ($19,500) of the total project cost. This is a decrease of 5.9 percentage points from 2014.

• Roofing replacements showed the largest decline in recoup cost from 2014 to 2015, with recoup cost declining 10.6 percentage points year-over-year to 71.4 percent ($13,210) of the total project cost.

• The five least profitable projects recouped an average 57.3 percent of the total project cost – 2.4 percentage points

more than 2014. The five projects with largest declines in recoup costs dropped an average of 8.5 percentage points, compared to an average year-over-year decline of 13.66 percentage points in 2014.



Austin

Home remodeling projects in Austin showed the highest recoup costs among Texas’s major markets as well as year-over-year declines in profitability, with recoup costs ranging between 49.7 percent and 163.4 percent.

• Manufactured stone veneer projects were the most profitable projects in 2015, recouping 163.4 percent ($12,283) of the total project cost. Because this project category was added in 2015, historical comparisons are not available.

• Upscale garage door replacements showed the highest year-over-year increase in recoup cost in 2015, increasing 20.2 percentage points year-over-year to recoup 109.3 percent ($3,347) of the total project cost.

• The five most profitable projects recouped an average 123 percent of the total project cost – 9.3 percentage points more

than 2014. However, only two projects showed year-over-year gains in recoup costs in 2015, for an average increase of 11.4 percentage points. This compares to an average year-over-year increase of 26.6 percentage points in 2014.



Austin, continued

• Backup power generators were the least profitable project, recouping 49.7 percent ($6,042) of the total project cost. This is a 30.9 percentage point decrease from 2014.

• Wood deck additions showed the largest decline in recoup cost from 2014 to 2015, with recoup cost dropping 45 percentage points year-over-year to recoup 71 percent ($6,385) of the total project cost.

• The five least profitable projects recouped an average 55.1 percent of the total project cost – 7.5 percentage points less

than 2014. The five projects with largest year-over-year decreases in recoup costs decreased an average of 35.8 percentage points, compared to an average year-over-year decrease of 9.1 percentage points in 2014.



Dallas The profitability of most home remodeling projects in Dallas declined slightly in 2015, with recoup costs ranging between 51.5 percent and 108.6 percent.

• Manufactured stone veneer projects were the most profitable projects in 2015, recouping 108.6 percent ($7,920) of the total project cost. Because this project category was added in 2015, historical comparisons are not available.

• Upscale garage door replacements once again showed the highest annual gain in recoup cost in 2015, increasing 19 percentage points year-over-year to recoup 82.2 percent ($2,550) of the total project cost.

• The five most profitable projects recouped an average 96.1 percent of the total project cost – 2.4 percentage points less than 2014. The five projects with highest year-over-year increase in recoup costs increased an average of 11.7 percentage points, compared to an average year-over-year increase of 22.28 percentage points in 2014.

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Dallas, continued

• Upscale bathroom remodels were the least profitable project, recouping 51.5 percent ($28,618) of the total project cost. This is a 24.9 percentage point decrease from 2014.

• Roofing replacements showed the greatest decline in recoup cost from 2014 to 2015, with recoup cost decreasing 44.3

percentage points year-over-year to recoup 70.2 percent ($13,548) of the total project cost.

• The five least profitable projects recouped an average 55.6 percent of the total project cost – 1.8 percentage points more than 2014. The five projects with largest year-over-year declines in recoup costs decreased an average of 24.6 percentage points, compared to an average year-over-year decline of 18.78 percentage points in 2014.

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El Paso

Previously the least profitable major Texas market for home remodeling projects, El Paso was the third-most profitable market for remodeling projects in 2015, with recoup costs ranging between 25.5 percent and 132.5 percent.

• Fiberglass attic insulation was the most profitable project, recouping 132.5 percent ($1,633) of the total project cost. Because this project category was added in 2015, historical comparisons are not available.

• Midrange garage door replacements showed the highest annual gain in recoup cost in 2015, increasing 40.1 percentage points year-over-year to recoup 112.1 percent ($1,667) of the total project cost.

• The five most profitable projects recouped an average 96.7 percent of the total project cost – 24.4 percentage points more than 2014. The five projects with highest year-over-year increases in recoup costs increased an average of 17.9 percentage points, compared to an average year-over-year increase of 2.88 percentage points in 2014.



El Paso, continued

• Upscale bathroom remodels were the least profitable project, recouping 25.5 percent ($13,750) of the total project cost, a 26.7 percentage point decrease from 2014. Upscale bathroom remodels also showed the greatest year-over-year decline in recoup cost, with recoup cost dropping 26.7 percent from 2014.

• The five least profitable projects recouped an average 27.1 percent of the total project cost – 11.4 percentage points less than 2014. The five projects with largest year-over-year declines in recoup costs decreased an average of 21.4 percentage points, compared to an average year-over-year decline of 64.42 percentage points in 2014.



Houston

The profitability of home remodeling projects in Houston bounced back in 2015, with nearly all projects gaining recoup cost value from the year prior. Recoup costs ranged from 62.9 percent and 110.4 percent of the total project cost.

• Midrange garage door replacements were the most profitable project, recouping 110.4 percent ($1,702) of the total project cost. This is a 31.3 percentage point increase from 2014.

• Roofing replacements showed the highest annual gain in recoup cost in 2015, increasing 34.3 percentage points year-over-year to recoup 89.1 percent ($16,602) of the total project cost.

• The five most profitable projects recouped an average 99.5 percent of the total project cost – 20.8 percentage points more than 2014 – whereas the five projects with fastest-growing recoup costs increased an average of 29.9 percentage points, compared to an average year-over-year decline of 3.22 percentage points in 2014.



Houston, continued

• Midrange bathroom additions were the least profitable project, recouping 62.9 percent ($24,294) of the total project cost. This is a 15.5 percentage point increase from 2014.

• Midrange composite deck additions showed the greatest loss in recoup cost from 2014 to 2015, with recoup cost

dropping 4.1 percentage points year-over-year to recoup 65.8 percent ($10,389) of the total project cost.

• The five least profitable projects recouped an average 66.78 percent of the total project cost – 17 percentage points more than 2014. The five projects with a year-over-year decrease (midrange composite deck additions) or the smallest annual increase in recoup costs increased an average 3.94 percentage points, compared to an average year-over-year decline of 26.26 percentage points in 2014.



San Antonio

San Antonio was the least profitable market for home remodeling projects in 2015, with recoup costs ranging from 45 percent and 107.1 percent. All but three projects showed year-over-year declines in profitability in 2015.

• Fiberglass attic insulation was the most profitable project in 2015, recouping 107.1 percent ($1,314) of the total project cost. Because this project category was added in 2015, historical comparisons are not available.

• Minor kitchen remodels showed the largest annual gain in recoup cost in 2015, increasing 15.1 percentage points year-over-year to recoup 86.7 percent ($15,933) of the total project cost.

• The five most profitable projects recouped an average 88.2 percent of the total project cost – 6.4 percentage points less

than 2014. Only three projects showed year-over-year gains in recoup costs in 2015, for an average of 6.4 percentage points. This compares to an average year-over-year increase in recoup costs of 31.3 percent in 2014.



San Antonio, continued

• Midrange bathroom additions were the least profitable project in 2015, recouping 45 percent ($16,769) of the total project cost. This is a 13.1 percentage point decrease from 2014.

• Backup power generators showed the largest decrease in recoup cost from 2014 to 2015, with recoup cost dropping 59.5 percentage points year-over-year to recoup 69.7 percent ($8,386) of the total project cost.

• The five least profitable projects recouped an average 49.6 percent of the total project cost – 2.8 percentage points less

than 2014. The five projects with largest year-over-year declines in recoup costs decreased an average of 31.1 percentage points, compared to an average year-over-year decline of 15.96 percentage points in 2014.



McAllen

The McAllen market was introduced to the Texas Remodel Valuation Report last year and showed the second-highest increase in home remodeling recoup costs in 2015. Recoup costs ranged from 81.3 percent to 163.1 percent.

• Steel entry door replacements were the most profitable project, recouping 163.1 percent ($2,000) of the total project cost. This project also showed the highest annual gain in recoup cost in 2015, increasing 65.7 percentage points year-over-year.

• The five most profitable projects recouped an average 126.1 percent of the total project cost – 26.6 percentage points more than 2014. The five projects with largest year-over-year gains in recoup costs increased an average of 39.7 percentage points from 2014.



McAllen, continued

• Major kitchen remodels were the least profitable project in 2015, recouping 81.3 percent ($44,000) of the total project cost, a 1.3 percentage point decrease from 2014.

• Vinyl siding replacement showed the largest decline in recoup cost from 2014 to 2015, with recoup cost decreasing 12.3

percentage points year-over-year to recoup 95.9 percent ($10,200) of the total project cost.

• The five least profitable projects recouped an average 86.4 percent of the total project cost – 36.8 percentage points more than 2014. The five projects with largest year-over-year declines in recoup costs decreased an average of 6.7 percentage points from 2014.


About the Texas Remodel Valuation Report The Texas Remodel Valuation Report is based on data from the 2015 Cost vs. Value Report by the National Association of REALTORS® and Remodeling magazine. The Texas Association of REALTORS® distributes insights about the Texas housing market each month, including quarterly market statistics, trends among homebuyers and sellers, luxury home sales, international trends and more. To view the Texas Remodel Valuation Report in its entirety, visit TexasRealEstate.com.

About the Texas Association of REALTORS® With more than 90,000 members, the Texas Association of REALTORS® is a professional membership organization that represents all aspects of real estate in Texas. We advocate on behalf of Texas REALTORS® and private-property owners to keep homeownership affordable, protect private-property rights, and promote public policies that benefit homeowners. Visit TexasRealEstate.com to learn more.

Contact: Stacy Armijo Pierpont Communications 512-448-4950 [email protected]


2 TexasRealEstate.com Source: 2015 Cost vs. Value Report by the National Association of REALTORS® and Remodeling magazine

Executive Summary Home remodeling projects in Texas’s major cities continued to be popular and profitable in 2014, according to the 2015 Texas Remodel Valuation Report released today by the Texas Association of REALTORS®. The report analyzes the recoup costs in 2014 for more than 20 different remodeling projects nationwide, in the West South-Central U.S., and in Austin, Dallas, El Paso, Houston, McAllen and San Antonio. Four of the five Texas markets in the report showed gains in project recoup costs in 2014, excluding Houston, which showed small declines in recoup cost growth. For the second year in a row, functional remodeling projects were significantly more profitable than upscale remodels and additions. According to the report, the most profitable remodeling projects were dominated by those that boosted a home’s curb appeal. Steel entry door and garage door replacements ranked among the top five projects in most markets, recouping up to 113.2 percent and 107.6 percent of recoup costs, respectively. Siding, roofing and window replacements – and a new project, stone veneer accents – also frequently yielded higher returns than costs. Projects that maximized a home’s existing square footage and sustainability continued to be popular in 2014, but less so than in 2013. Basement remodels recouped up to 98 percent of project costs, but attic bedroom additions – popular in 2013 – were no longer a top project. Backup power generators, the most profitable project in the 2014 report, remained a top project in only two markets yet still recouped up to 129.2 percent of project costs. Conversely, big-ticket projects and upscale additions were increasingly less profitable in 2014. The least profitable project in most markets – sunroom additions – recouped only between 29.3 percent and 51.8 percent of the total project cost, 10 percent less on average than in 2013.



Marketwide TrendsCurb appeal is king. Both nationally and in Texas, the top home remodeling projects in 2014 were those that boost a home’s curb appeal. Practical remodels that directly improve a home’s functionality or sustainability were still among the most profitable projects, but less so than in 2013.

o Entry door and garage door replacements ranked in

the top five most profitable projects nationwide, regionally and in Austin, Dallas, El Paso and Houston. Entry door replacements recouped up to 113.2 percent of the total project cost, whereas garage door replacements recouped up to 107.6 percent of the total project cost.

o Siding replacement ranked in the top five most

profitable projects nationwide and in Dallas, El Paso, Houston, San Antonio and Midland, recouping up to 108.2 percent of the total project cost.

o Stone veneer accents, a new project category, ranked as the most profitable project in the West South-Central U.S., Austin, Houston and McAllen, recouping up to 123.7 percent of the total project cost.

• Remodeling projects that improved a home’s

outward appearance (and thus its sell factor) were increasingly profitable in 2014.



Marketwide Trends (cont.)

• Profitable projects also continued to be those that added livable square footage to a home using existing spaces

or increased a home’s sustainability:

o Basement remodels ranked in the top five for total recoup cost in the West-South Central U.S., Dallas and

Houston, recouping up to 98 percent of the total project cost.

o Wooden deck additions were still among the five most profitable projects in Austin and El Paso, recouping up to 116 percent of the total project cost.

o Backup power generators, last year the most profitable project nationwide and in multiple Texas markets,

remained in the top spot in San Antonio and among the top five most profitable projects in McAllen, recouping up to 129.2 percent of the total project cost.

o Window replacements ranked in the top five most profitable projects in Austin, Dallas and McAllen, recouping

up to 116.5 percent of the total project cost.

o Roofing replacements ranked in the top five most profitable projects in the West-South Central U.S. and in Dallas and was among the top five highest annual increases in recoup costs in four markets, recouping up to 114.5 percent of the total project cost.

• Less practical projects and upscale renovations continued to be among the least profitable projects in all

markets.



Marketwide Trends (cont.)

• Upscale projects ranked among the least profitable projects and in the bottom five for recoup cost growth in all markets except Houston, with many of those projects being additions that did not utilize the home’s existing square footage.

• Sunroom additions were the least profitable project nationally, in the West South-Central U.S., and in Austin, Dallas, El Paso, and in San Antonio, recouping a maximum 51.8 percent and as little as 29.3 percent of the total project cost.

• Home office remodels closely followed

sunroom additions as one of the least profitable remodeling projects, ranking in the top five least profitable projects in Austin, Dallas, San Antonio and McAllen as well as in the West South-Central U.S. and nationally. Home office remodels recouped a maximum of 62.2 percent and as little as 47.2 of the total project cost.

• Master suite additions, both typical and

upscale, also continued to be unprofitable. These projects ranked among the five least profitable projects in Austin, El Paso, Houston, San Antonio, McAllen, in the West South-Central U.S. and nationally.

• Master suite additions, both typical and upscale, also continued to be unprofitable. These projects ranked among the five least profitable projects in Austin, El Paso, Houston, San Antonio, McAllen, in the West South-Central U.S. and nationally.



Nationwide

Home remodeling projects became less profitable nationwide, with a majority of projects showing losses in recoup cost in 2014.

• Steel entry door replacements were the most profitable project for the second year in a row, recouping 101.8 percent ($1,252) of the total project cost. This project also had the largest year-over-year gains in recoup costs, increasing 5.2 percent from 2013 to 2014.

• The five most profitable projects recouped an average 90.56 percent of the total project cost – 2.76 percent more than 2013 – whereas the five projects with fastest-growing recoup costs only increased an average 3.52 percent, 7.54 percent less than 2013.

• Sunroom additions were the least profitable project, recouping 48.5 percent ($36,704) of the total project cost, a 3.2

percent loss from 2013 to 2014.



Nationwide (cont.)

• Two-story additions had the greatest loss in recoup cost from 2013 to 2014, with recoup cost falling 7.7 percent year-over-year to 64.1 percent ($103,848) of the total project cost.

• The five least most profitable projects recouped an average 52.68 percent of the total project cost – 37.88 percent less

than 2013 – whereas the five projects with largest decreases in recoup costs decreased an average 7.14 percent, 3.62 percent more than 2013.



West South Central U.S.

Like the rest of the U.S., home remodeling projects in the West South Central U.S. were less profitable in 2014 than 2013, with recoup costs ranging between 46.6 percent and 98.2 percent.

• Stone veneer accents were the most profitable project, recouping 98.2 percent ($6,913) of the total project cost. Because this project category was added in 2014, historical comparisons are not available.

• Midrange garage door replacements – last year the project with the highest year-over-year decrease in recoup costs – showed the highest annual gain in recoup cost in 2014. The recoup cost increased 10 percent year-over-year to recoup 86 percent ($1,281) of the total project cost.

• The five most profitable projects recouped an average 89.52 percent of the total project cost – 3.48 percent more than

2013 – whereas the five projects with fastest-growing recoup costs only increased an average 4.58 percent, 11.76 percent less than 2013.



West South Central U.S. (cont.)

• Like nationally, sunroom additions were the least profitable project, recouping 46.6 percent ($32,806) of the total project cost, an 11.4 percent gain from 2013.

• Minor kitchen remodeling projects had the greatest loss in recoup cost from 2013 to 2014, with recoup cost falling 19.1 percent year-over-year to 75.9 percent ($13,431) of the total project cost.

• The five least most profitable projects recouped an average 54.92 percent of the total project cost – 0.1 percent less

than 2013 – whereas the five projects with largest decreases in recoup costs decreased an average 13.66 percent, 9.24 percent more than 2013.



Austin

Once again, home remodeling projects in Austin had the greatest overall recoup costs among Texas’s five major cities, with recoup costs ranging between 123.7 percent and 51.8 percent.


• Steel entry door replacements showed the highest annual gain in recoup cost in 2014, increasing 42.9 percent year-over-year to recoup 113.2 percent ($3,170) of the total project cost.


2013 – whereas the five projects with fastest-growing recoup costs increased an average 26.6 percent, 6.1 percent more than 2013.



Austin (cont.)

• Once again, sunroom additions were the least profitable project, recouping 51.8 percent ($36,352) of the total project cost, a 9.5 percent decrease from 2013.

• Master suite additions had the greatest loss in recoup cost from 2013 to 2014, with recoup cost dropping 9.9 percent year-over-year to recoup 77.1 percent ($79,538) of the total project cost.

• The five least most profitable projects recouped an average 62.6 percent of the total project cost – 3.9 percent less than

2013 – whereas the five projects with largest annual decreases in recoup costs decreased an average 9.1 percent, 2.82 percent more than 2013.



Dallas

The profitability of home remodeling projects remained largely the same in Dallas in 2014, with recoup costs ranging between 42.6 percent and 114.5 percent.

• Roofing replacements were the most profitable project, recouping 114.5 percent ($20,909) of the total project cost. This project also had the largest year-over-year gains in recoup costs, increasing 51.8 percent from 2013 to 2014.

• The five most profitable projects recouped an average 98.52 percent of the total project cost – 8.68 percent more than 2013 – whereas the five projects with fastest-growing recoup costs increased an average 22.28 percent, 8.92 percent more than 2013.



Dallas (cont.)

• Bathroom remodeling projects had the greatest loss in recoup cost from 2013 to 2014, with recoup cost dropping 23.1 percent year-over-year to recoup 75 percent ($11,791) of the total project cost.

• The five least most profitable projects recouped an average 53.78 percent of the total project cost – 5.44 percent less than 2013 – whereas the five projects with largest annual decreases in recoup costs decreased an average 18.78 percent, 14.4 percent more than 2013.

• Once again, sunroom additions were the least profitable project, recouping 42.6 percent ($30,677) of the total project cost, a 13.7 percent decrease from 2013.



El Paso

Home remodeling projects were the least profitable in El Paso in 2014, with recoup costs ranging between 29.3 percent and 80.7 percent.

• Steel entry door replacements were the most profitable project, recouping 80.7 percent ($888) of the total project cost. This is a decrease of 4.4 percent in recoup costs from 2013.

• Vinyl siding replacements showed the highest annual gain in recoup cost in 2014, increasing 11.5 percent year-over-year to recoup 66.9 percent ($6,700) of the total project cost.

• The five most profitable projects recouped an average 72.34 percent of the total project cost – 45.12 percent less than 2013 – whereas the five projects with fastest-growing recoup costs increased an average 2.88 percent, 45.08 percent less than 2013.



El Paso (cont.)

• Sunroom additions were the least profitable project, recouping 29.3 percent ($19,917) of the total project cost, an 8.7percent decrease from 2013.

• Backup power generators – a top remodeling project in the 2014 report – had the greatest loss in recoup cost from 2013 to 2014, with recoup cost dropping 116.4 percent year-over-year to recoup 50.8 percent ($5,682) of the total project cost.

• The five least most profitable projects recouped an average 38.52 percent of the total project cost – 12.28 percent less than 2013 – whereas the five projects with largest annual decreases in recoup costs decreased an average 64.42 percent, 49.72 percent more than 2013.



Houston

Home remodeling projects in Houston were less profitable across the board in 2014, with all projects losing recoup cost value from the year prior. Recoup costs ranged from 86.6 percent and 47.4 percent.


• Sunroom additions in Houston had the smallest lost in recoup cost in 2014, decreasing 0.6 percent to 51.9 percent ($36,802) of the total project cost despite also being the No. 4 least profitable remodeling project in the Houston market. Unlike other markets, upscale projects such as deck, garage and family room additions had some of the smallest declines in recoup costs in 2014.



Houston (cont.)

• The five most profitable projects recouped an average 78.68 percent of the total project cost – 16.04 percent less than 2013 – whereas the five projects with the smallest declines in recoup costs fell an average 3.22 percent in 2014, compared to an average gain of 12.54 percent in 2013.

• Bathroom additions were the least profitable project, recouping 47.4 percent ($17,147) of the total project cost, a 9.8

percent decrease from 2013.

• A top project in other markets, fiberglass entry door replacements had the greatest loss in recoup cost from 2013 to 2014, with recoup cost dropping 32.9 percent year-over-year to recoup 58.3 percent ($1,642) of the total project cost. Steel entry door replacements were also in the bottom five, with recoup costs falling 26.7 percent year-over-year.

• The five least profitable projects recouped an average 49.78 percent of the total project cost – 5.38 percent more than

2013 – whereas the five projects with largest annual decreases in recoup costs decreased an average 26.26 percent, 10.88 percent more than 2013.

• The bottom five projects recouped an average 54.4 percent of the total project cost, whereas the bottom five fastest-

growing projects decreased an average of 11.38 percent.



San Antonio

Remodeling projects rebounded in San Antonio in 2014, showing the second-highest marketwide gains in recoup costs. Recoup costs ranged from 45.6 percent and 129.2 percent.

• San Antonio was the only market in which one of the top remodeling projects of 2013 – backup power generator installation – remained on top. Backup power generators were the most profitable project in 2014, recouping 129.2 percent ($14,667) of the total project cost. This project also had the largest year-over-year gains in recoup costs, increasing 77.1 percent from 2013 to 2014.


2013 – whereas the five projects with the fastest-growing recoup costs increased an average 31.3 percent, 33.72 percent more than 2013.



San Antonio (cont.)

• Once again, sunroom additions were the least profitable project in 2014, recouping 45.6 percent ($31,696) of the total project cost, a 4.1 percent decrease from 2013.

• A top project in other markets, upscale garage door replacements had the greatest loss in recoup cost from 2013 to 2014, with recoup cost dropping 43.1 percent year-over-year to recoup 66.2 percent ($1,873) of the total project cost.

• The five least profitable projects recouped an average 52.38 percent of the total project cost – 2.2 percent less than 2013

– whereas the five projects with largest annual decreases in recoup costs decreased an average 15.96 percent, 16.78 percent less than 2013.



McAllenMcAllen is a new market to the Texas Remodel Valuation Report. For this reason, historical re modeling project data is available. Recoup costs ranged from 53.9 percent to 119.4 percent.

• Remodeling projects were popular and profitable in McAllen, Texas in 2014. The five most profitable projects recoupedan average 108.2 percent of the total project cost.

• Stone veneer accents were the most profitable project in 2014, recouping 119.4 percent ($8,333) of the total project cost.

• Upscale garage additions were the least profitable project in 2014, recouping 53.9 percent ($39,500) of the total projectcost.

• The five least profitable projects recouped an average 57.86 percent of the total project cost.


About the Texas Remodel Valuation Report The Texas Remodel Valuation Report is based on data from the 2014 Cost vs. Value Report by the National Association of REALTORS® and Remodeling magazine. The Texas Association of REALTORS® distributes insights about the Texas housing market each month, including quarterly market statistics, trends among homebuyers and sellers, luxury home sales, international trends and more. To view the Texas Remodel Valuation Report in its entirety, visit TexasRealEstate.com.

About the Texas Association of REALTORS® With approximately 90,000 members, the Texas Association of REALTORS® is a professional membership organization that represents all aspects of real estate in Texas. We advocate on behalf of Texas REALTORS® and private-property owners to keep homeownership affordable, protect private-property rights, and promote public policies that benefit homeowners. Visit TexasRealEstate.com to learn more.

Contact: Stacy Armijo Pierpont Communications 512-448-4950 [email protected]



Executive Summary Home remodeling projects in Texas’s major cities grew increasingly profitable and popular in 2013, according to the 2014 Texas Remodel Valuation Report released today by the Texas Association of Realtors. The report analyzed the project recoup costs and recoup cost growth in 2013 for over 20 different remodeling projects nationwide, in the south central U.S., and in Austin, Dallas, El Paso, Houston and San Antonio. All five markets except San Antonio showed significant gains in project recoup costs in 2013. Remodeling trends, however, were evident statewide. In all markets, smaller, functional remodeling projects showed greater increases in recoup costs than upscale, less practical projects. Smaller projects that boost a home’s curb appeal continued to be popular in most markets. Steel entry door replacements, for example, ranked No. 1 for recoup total recoup cost nationwide, in the west south central U.S., and in Houston, recouping up to 105.5 percent of the total project cost.

In addition, projects that increased a home’s livable square footage using existing spaces showed significantly higher recoup cost values and growth in 2013. Basement remodels ranked in the top five for recoup cost in four of the five major cities in Texas, recouping up to 99.6 percent of the total project cost. Conversely, costly room additions and upscale remodeling projects were among the least profitable projects. Sunroom additions, for example, ranked in the bottom five for recoup cost in five Texas metro areas, recouping a maximum of 61.3 percent and as little as 38 percent of the total project cost. Major renovations were popular in more functional rooms such as kitchens and bathrooms. Kitchen remodeling projects ranked in the top five for recoup cost growth in all five Texas metro areas, recouping up to 143.9 percent of the total project cost. Finally, projects that increased a home’s sustainability showed significantly higher recoup cost values and growth in 2013. Backup power generators ranked No. 1 for recoup cost growth in Austin, El Paso and Houston – including a 105.1 percent gain in recoup cost in El Paso. In addition, natural materials (wood, cement, steel) led to a significantly higher recoup cost than synthetic, plastics-based materials (composites, vinyl).



Marketwide Trends

In all markets, practical remodels that directly improve a home’s functionality, sustainability and curb appeal were generally more profitable than upscale, luxury projects in 2013. • Small projects that increase a home’s curb appeal (and thus

its sell factor) continued to be popular in 2013:

o Steel entry door replacement ranked No.1 in total recoup cost nationwide, in the west south central U.S., and in Houston, recouping up to 105.5 percent of the total project cost.

o Fiber-cement siding replacement ranked in the top five for total recoup cost nationwide, in the west south central U.S., Dallas, Houston, and San Antonio, recouping up to 93.2 percent of the total project cost.

o Garage door replacements ranked in the top five for recoup costs nationwide and in San Antonio, recouping up to 109.3 percent of the total project cost.

• Profitable projects were also those that added livable square

footage to a home using existing spaces: o Wooden deck additions ranked in the top five for total recoup cost nationwide, in the west south central U.S., Austin,

Dallas, and San Antonio, recouping up to 111.9 percent of the total project cost.



Marketwide Trends

o Basement remodels ranked in the top five for total recoup cost in four of the five major cities in Texas, including Austin, Dallas, El Paso, San Antonio plus the west south central U.S., recouping up to 99.6 percent of the total project cost.

o Converting an attic into a bedroom ranked in the top five for total recoup cost nationwide and in Austin, recouping up to 101.6 percent of the total project cost.

• Larger remodeling projects or additions were popular mostly for functional, utility rooms such as kitchens,

bathrooms and garages:

o Kitchen remodeling projects ranked in the top five for recoup cost in the west south central U.S. plus all five major markets in Texas, recouping up to 143.8 percent of the total project cost.

o Bathroom remodeling projects ranked in the top five for growth in recoup cost in the west south central U.S., Austin, Dallas, and El Paso, including ranking No. 1 in Dallas with a 23.6 percent gain in recoup cost.

o Garage additions ranked in the top five for recoup cost in Dallas and El Paso, recouping up to 86.8 percent of the

total project cost. • Finally, increasing a home’s sustainability was a significant profitability factor as well.

o Installing a backup power generator ranked No. 1 for growth in recoup cost nationwide, in the west south central

U.S., Austin, El Paso and Houston, including a 105.1 percent gain in recoup cost in El Paso.

o Projects using steel, wood and cement were among the top five for total recoup cost across all markets, whereas projects using synthetic or composite materials showed some of the smallest growth in recoup costs, even declining in some markets.



Marketwide Trends

Conversely, less practical projects and upscale renovations were the least profitable projects in all markets, dropping in recoup costs in some markets. • Sunroom additions ranked in the bottom five for total recoup cost in all markets, recouping a maximum of 61.3 percent

and as little as 38 percent of the total project cost.

• Home office remodels ranked as the least profitable project nationwide, in the west south central U.S., Austin, and Houston and the fifth-least profitable project in San Antonio, recouping a maximum of 78.1 percent and as little as 48.9 percent of the total project cost.

• Master suite additions ranked in the bottom five for total recoup cost nationwide, in the west south central U.S., Dallas,

El Paso and Houston, recouping a maximum of 52 percent of the total project cost.

• Upscale projects ranked in the bottom five for total recoup cost and the bottom five for recoup cost growth in most all markets, with many of those projects being additions that did not utilize the home’s existing square footage.

In addition, larger exterior projects were among the least profitable in most markets, despite increasing a home’s curb appeal. • Roofing replacements ranked in the bottom five for recoup cost growth in the west south central U.S., Austin, Dallas and

El Paso, decreasing in recoup cost by as much as 19.2 percent in 2013.

• Window replacements ranked in the bottom five for recoup cost growth in the west south central U.S. and in El Paso, decreasing in recoup cost by as much as 17.1 percent in 2013.



Marketwide Trends

In addition, larger exterior projects were among the least profitable in most markets, despite increasing a home’s curb appeal. • Roofing replacements ranked in the bottom five for recoup cost growth in the west south central U.S., Austin, Dallas and

El Paso, decreasing in recoup cost by as much as 19.2 percent in 2013.

• Window replacements ranked in the bottom five for recoup cost growth in the west south central U.S. and in El Paso, decreasing in recoup cost by as much as 17.1 percent in 2013.



Nationwide

Home remodeling projects became more popular nationwide, with all projects showing gains in recoup cost in 2013.

• Steel entry door replacements were the most profitable project, recouping 96.6 percent ($1,122) of the total project cost, an 11 percent gain in 2013 ($123).

• The largest gain in recoup cost in 2013 was in backup power generator installation, which increased 14.8 percent ($1,576) to recoup 67.5 percent ($7,922) of the total project cost.

• The top five projects recouped an average 87.8 percent of the total project cost, whereas the top five fastest-growing projects increased an average of 11.06 percent.



Nationwide

• Home office remodeling projects were the least profitable, recouping 48.9 percent ($13,697) of the total project cost, a 5.3 percent ($1,078) gain in 2013.

• The smallest gain in recoup cost in 2013 was in major kitchen remodeling projects, which increased 3.9 percent ($2,615) to recoup 63.6 percent ($69,973) of the total project cost.

• The bottom five projects recouped an average 55.02 percent of the total project cost, whereas the bottom five fastest-growing projects increased an average of 4.32 percent.

• There was a range of 47.7 percent between the project without the highest recoup cost (steel entry door replacement)

and the project with the lowest recoup cost (home office remodel).




Home remodeling projects showed greater recoup cost values in the West South Central U.S., with the highest project recoup cost at more than 100 percent and the lowest at almost 60 percent.

• Steel entry door replacement was the most profitable project, recouping 101 percent ($1,112) of the total project cost, a 17.2 percent ($186) gain in 2013.

• The largest gain in recoup cost in 2013 was in backup power generator installation, which jumped 26.5 percent ($2,738) to recoup 86 percent ($9,533) of the total project cost.

• The top five projects recouped an average 93 percent of the total project cost, whereas the top five fastest-growing projects increased an average of 16.34 percent.




• Home office remodeling projects were the least profitable, recouping 58 percent ($14,969) of the total project cost, a 6.4 percent ($1,204) gain in 2013.

• The largest decrease in recoup cost in 2013 was in midrange garage door replacement projects, which decreased 2.4

percent ($49) to recoup 76 percent ($1,076) of the total project cost. • The bottom five projects recouped an average 55.02 percent of the total project cost, whereas the bottom five fastest-


• There was a range of 43 percent between the project without the highest recoup cost (steel entry door replacement) and the project with the lowest recoup cost (home office remodel).



Austin

Home remodeling projects in Austin had the greatest overall recoup cost values among Texas’s five major cities, with the highest project recoup cost at 111.9 percent and the lowest at 61 percent.

• Wood deck additions were the most profitable projects, recouping 111.9 percent ($9,562) of the total project cost, a 20 percent ($1,674) gain in 2013.This popularity for deck additions applied to composite decks as well, which had the No. 5 fastest-growing recoup cost – a 13.2 percent ($1,785) increase to 91.2 percent ($13,338) of the total project cost in 2013.

• The largest gain in recoup cost in 2013 was in backup power generator installation, which jumped 32.9 ($3,290) percent to recoup 77.6 percent ($8,639) of the total project cost.




Austin

• Home office remodeling projects were the least profitable, recouping 61 percent ($15,642) of the total project cost, a 2.8 percent ($248) gain in 2013.

• Steel entry door replacements, a leading remodeling project in other markets, had the highest decrease in recoup cost, dropping 13.5 percent ($148) to 82.7 percent ($903) of the total project cost in 2013.



• There was a range of 50.9 percent between the project without the highest recoup cost (wooden deck addition) and the project with the lowest recoup cost (home office remodel).



Dallas

Home remodeling projects in Dallas showed the shortest range in recoup costs among Texas’s five major cities. There was a range of 44.3 percent between the project with the highest recoup cost and the project with the lowest recoup cost.

• Midrange bathroom remodels were the most profitable projects, recouping 98.1 percent ($14,412) of the total project cost, a 23.6 percent ($3,293) gain in 2013. This was also the largest gain in recoup costs in 2013.

• Sunroom additions, while among the least profitable projects in other markets, was the No. 5 fastest-growing project in 2013, increasing 10.3 percent ($5,551) to 56.3 percent ($38,902) of the total project cost.

• The top five projects recouped an average 89.84 percent of the total project cost whereas the top five fastest-growing projects increased an average of 13.36 percent.



Dallas

• Home office remodeling projects were the least profitable, recouping 53.8 percent ($13,970) of the total project cost, but still an 8.1 percent ($1,487) gain in 2013.

• The largest decrease in recoup cost in 2013 was in upscale roofing replacements, which decreased 6.2 percent ($2,228)

to recoup 61 percent ($17,603) of the total project cost.

• Steel entry door replacements, a leading remodeling project in other markets, had the second-highest decrease in recoup cost, dropping 4.6 percent ($55) to 81.4 percent ($888) of the total project cost in 2013.





El Paso

Home remodeling projects in El Paso showed the greatest range in recoup costs among Texas’s five major cities. There was a range of 129.2 percent between the projects with the highest recoup cost and the project with the lowest recoup cost.

• Backup power generator installations were the most profitable project, recouping 167.2 percent ($18,135) of the total project cost, a 105.1 percent ($11,218) gain in 2013. This was also the largest gain in recoup costs in 2013.

• Along with Austin, El Paso was one of only two Texas major cities to have two remodeling projects recoup more than 100 percent of the total project cost. Minor kitchen remodeling projects recouped 143.8 percent ($23,970) of the total project cost, a 60.4 percent ($9,990) increase in 2013.



El Paso


• Sunroom additions were the least profitable, recouping only 38 percent ($25,338) of the total project cost, an 18 percent ($13,387) drop in 2013. This was also the greatest decrease in recoup costs for El Paso remodeling projects in 2013.

• The bottom five projects recouped an average 50.8 percent of the total project, whereas the bottom five fastest-growing projects decreased an average of 14.7 percent.



Houston

Home remodeling projects in Houston had the second-greatest overall recoup cost values among Texas’s five major cities, with the highest project recoup cost at 105.5 percent and the lowest at 48.9 percent.

• Steel entry door replacements were the most profitable project, recouping 105.5 percent ($1,153) of the total project cost, a 9.2 percent ($100) gain in 2013.

• The largest gain in recoup cost in 2013 was in backup power generator installation, which jumped 29.7 percent ($3,470) to recoup 93.6 percent ($10,419) of the total project cost.

• Sunroom additions were the No. 5 fastest-growing project in 2013, increasing 4.8 percent ($2,471) to 52.5 percent ($36,189) of the total project cost, despite also being the No. 2 least profitable project in Houston.



Houston


• Home office remodeling projects were the least profitable, recouping 48.9 percent ($12,653) of the total project cost, an 8.1 percent ($2,393) decrease in 2013.

• The largest decrease in recoup cost in 2013 was in composite deck additions, which decreased 13.6 percent ($859) to

recoup 58.1 percent ($18,961) of the total project cost.

• Wooden deck additions, a leading remodeling project in other markets, had the second-highest decrease in recoup cost, dropping 13.4 percent ($1,172) to 75.7 percent ($6,526) of the total project cost in 2013.





San Antonio

Unlike the other four major Texas cities, remodeling projects became less popular in San Antonio, with all projects showing losses in recoup cost in 2013.

• While the top remodeling project in San Antonio recouped more than 100 percent of the total project cost, two of the top five most profitable projects showed a double-digit decrease in recoup cost in 2013.

• Upscale garage door replacements were the most profitable project, recouping 109.3 percent ($2,924) of the total project cost, a 0.4 percent ($1) decline in 2013. This project also showed the smallest loss in recoup cost in 2013.

• The top five projects recouped an average 85.8 percent of the total project cost, whereas the top five projects with the smallest losses in recoup costs decreased an average of 2.42 percent.



San Antonio • Conversely from upscale garage door replacements, the largest decrease in recoup cost in 2013 was in midrange garage

door replacements, which dropped 42.3 percent ($615) to recoup 57 percent ($615) of the total project cost.

• Sunroom additions were the least profitable remodeling project, recouping 49.7 percent ($33,816) of the total project cost, a 5.8 percent ($4,658) decrease in 2013.

• Backup power generators, a leading remodeling project in other markets, had the second-lowest recoup cost in San

Antonio, dropping 15.7 percent ($1,856) to 52.1 percent ($5,750) of the total project cost in 2013. Steel entry doors showed a similar decline, dropping 32.7 ($356) percent to 71.4 percent ($778) of the total project cost in 2013.



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