Homeownership is an emotional and financial undertaking that can accumulate a high property value over time, with certain factors in play. For instance, your home’s location to schools, grocery stores and other amenities may deliver a desirable market boost. Housing demand and the state of the economy can also impact your home value.
According to HomeLight’s Top Agent Insights for New Year 2023 report, higher interest rates and inflation have many buyers pressing pause on their search for a home in Q1 of 2023. Ninety-five percent of home listings sit on the market for longer, while price reductions occur at a rate of 92%.
Nevertheless, homeowners can increase their chances of selling at an excellent price by renovating their home’s interiors and exteriors to appeal to buyers. Whether you’re getting ready to move or are investing in upgrades for a higher price point, these five features will deliver the most resale value.
Many people agree the kitchen is the heart of every home — so it shouldn’t be surprising that renovating the kitchen is a surefire way to increase your home’s asking price. The 2022 U.S. Houzz Kitchen Trends Study says kitchen remodeling is on the rise, with 20% of homeowners deeming a large island essential to their household’s function and remote work.
The data aligns with another recent House Digest report that found 51% of homeowners prefer a kitchen with an island. Other popular kitchen upgrades from Houzz include engineered quartz and granite countertops, smart appliances and white and gray color palettes.
A mid-range kitchen remodel could yield a 56% return on investment (ROI) but add over $45,000 to your home value. However, you don’t need to break the bank for your kitchen to appeal to buyers — even minor updates could increase your listing price.
American consumers have shown increasing interest in sustainability — and it’s trickled into the housing market. In the United States, 22% of consumers have dramatically altered their buying behaviors to lean green, while 55% report making moderate changes for eco-friendliness. This trend is most prevalent among younger generations — millennials and Gen Z — who are typically first-time homebuyers.
In a National Association of Realtors (NAR) survey, 36% of realtors said solar panels increase property values, while 5% of agents indicate a 6–10% increase in the listing price for high performance. Energy-efficient upgrades might include the following features:
According to Rocket Homes, you should allot about 600–700 square feet for each household member — meaning, 1,800 square feet is sufficient for a family of three, while a family of four might live more comfortably in a 2,400-square-foot house. While that doesn’t mean a 2,000-plus-square-foot home is always desired or affordable for four occupants, you can’t go wrong with increasing the square footage.
In fact, additional living space may deliver one of the highest resale values on your home. According to Remodeling’s Cost vs. Value 2022 estimates, a mid-range primary suite addition costing $175,473 could carry a $93,762 resale value — or 53.4% ROI. Likewise, a bathroom addition may have a 51.8% ROI.
Building a detached addition — such as an accessory dwelling unit (ADU) — is also highly desirable among buyers. Some might perceive an ADU as an investment opportunity. In California, a 600-square-foot ADU can average about $2,000 in monthly rent in areas where available apartments are in short supply.
Other homebuyers might be looking for a bigger home to accommodate an older relative. About 66.7 million American adults live in a multi-generational house — a trend that rose during the COVID-19 pandemic.
Showing pride in your home’s exterior goes a long way in boosting its resale value. Homeowners who invest in their property’s curb appeal just about always make it back when they list.
Studies show curb appeal may amount to twice as much in market value as the neighbor across the street. Meanwhile, the combined curb appeal of your home and your neighbors’ could amount to a 7% increase in resale value. People tend to pay more for curb appeal when the housing market is slower. You might consider the following exterior upgrades to add to your home’s resale price:
Zillow also highlights how the color of your front door could impact buyer offers. For example, buyers are willing to pay a premium of $6,449 extra for homes with black doors — of course, black isn’t everyone’s taste. Doors with light blue-gray paint were a favorite among survey respondents, with a price increase of $1,537.
Of all the upgraded features homebuyers look for while house-hunting, refinished hardwood floors are at the top of their list. This particular project has the highest ROI and resale value.
Your floors get a lot of foot traffic from your home’s occupants and visitors. You may even have scratches, dents or stains if you’ve moved furniture around or dropped something at some point. Even if you spent years hiding trouble spots with your belongings, the throw rugs and couch would eventually need to move when you sell.
Refinished hardwood may be the only necessary project to reach your ideal listing price. The NAR says refurbished hardwood floors have a cost recovery of 147% — higher than new hardwood floors at 118%. You might consider refinishing your floors if you need to make room for new features or want to correct blemishes and older, worn-out surfaces.
Refurbished floor upgrades are usually more cost-effective than other large-scale renovations to your home and typically take little time to complete. Additionally, your floors will likely result in a positive wow factor when buyers walk through your front door.
A few upgrades are all you need to add to your home’s resale value. Some projects may be more extensive and costly than others, but if you play your cards right, the ROI when you go to sell will be well worth the money you spent.
Want to learn more about adding value to a home you are potentially selling?
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