The economic recession has begun to hammer the home improvement industry, but that's good news for home owners who are considering home improvements next year.
The Tampa, FL-based Home Improvement Research Institute says expect little if any growth in home improvement product sales in 2002 -- only 0.7 percent. That's a downward revision of the institute's forecast earlier this year when it said the market could expect a 3.9 percent sales growth in 2002.
By the end of this year, home improvement product sales should exceed 2000's sales pace by 5 percent, but sales won't rebound from next year's flat 0.7 percent increase until 2003 when sales will jump 6.1 percent as the economy strengthens, the institute said.
Next year's forecast doesn't bode well for the industry, but it does mean consumers likely will find bargains in home improvements -- a good investment tool to use to shore up equity in a down economy.
Home owners can further stretch their home improvement dollars by considering the most valuable home improvements.
Only seven of the 16 home improvement projects Remodeling Online examined in its latest "Cost vs. Value" report provided an average return of 75 percent or more.
Using HomeTech estimating software, Remodeling Online compared the estimated cost of a professional renovation or other improvement with the value it's likely to add to your home. The study examined cost and value figures for more than a dozen projects in 60 markets.
Of the 16 projects examined, those that didn't make the cut with a national average value return of 75 percent or more were a master suite addition and exterior painting (both 74 percent); bedroom attic transformation and siding replacement (both 73 percent); basement refinishing (69 percent); sunroom installation and window replacement (both 68 percent); reroofing (60 percent) and a home office transformation (54 percent).
Keep in mind, value added is a local matter. Demand for homes enhances the value of improvements so improvements made in a seller's market likely will add greater value than the same improvement in a buyer's market, says Remodeling Online.
Kitchens and baths were the best investments returning the greatest value, but both large and small jobs of other types can be good bets too, according to Remodeling Online's findings.
Based on national averages, here are the projects, and a brief description of each, that returned 75 percent or more of their cost to the value of the home, according to Remodeling Online.
Remember, these are national averages that can vary by location depending upon market conditions.
- Minor Kitchen Remodel cost $14,773 and returned $13,039 or 87 percent of the initial cost. Work was completed on a dated, but functional 200-square-foot kitchen with 30 linear feet of cabinetry and countertops. Existing cabinets were refinished with new raised-panel wood doors and the kitchen outfitted with a new energy-efficient wall oven and cooktop, laminate countertops, mid-priced sink and faucet. Wall coverings and resilient flooring were installed in the repainted room.
- Bathroom Addition cost $9,455 and returned $8,048 or 84 percent of the initial cost. Add a second full bath to a house with one or one and a half baths. The 6-by-8-foot full bath was added to a home with an existing one and a half baths, within the existing floor plan in an inconspicuous spot convenient to the bedrooms. The work included a cultured-marble vanity top, molded sink, standard bathtub with shower, low-profile toilet, lighting, mirrored medicine cabinet, linen storage, vinyl wallpaper, ceramic tile floor, and ceramic tile walls in tub area.
- Two-Story Addition cost $67,744 and returned $56,770 or 83 percent of the initial cost. The addition was a 24-by-16-foot two-story wing, over a crawl space, with a first-floor family room and a second-floor bedroom with full bath. A prefabricated fireplace went in the family room as did 11 windows, and an atrium-style exterior door. Floors were carpeted, and walls were painted drywall. The 5-by-8-foot bathroom included a fiberglass bath/shower, standard-grade toilet, wood vanity with ceramic tile sinktop, ceramic tile flooring, and a light strip above a mirrored medicine cabinet. The bathroom walls were wallpapered.
- Bathroom Remodel cost $9,748 and returned $7,952 or 81 percent of the initial cost. The improvement updated an existing 5-by-9-foot, 25-year-old bathroom with a new standard-sized tub, toilet, and solid-surface vanity counter and integral double sink, medicine cabinet, ceramic tile floor, and ceramic tile walls in tub/shower area. Vinyl wallpaper was used elsewhere.
- Major Kitchen Remodel cost $38,769 and returned $31,344 or 80 percent of the initial cost. The work updated an outmoded 200-square-foot kitchen with new design and installation of a more functional layout for new cabinets, laminate countertops, mid-priced sink and faucet, energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, garbage disposer, and custom lighting. A new resilient floor was installed. Finish included painted walls, trim, and ceiling. The work also included installing 30 linear feet of semi-custom grade wood cabinets and counter space, including a 3-by-5-foot center island.
- Family Room Addition cost $46,739 and returned $37,217 for 78 percent of the initial cost. Keeping in the style of the existing house, the improvement added a 16-by-25-foot room on a new crawls pace foundation constructed with wood joist floor framing, wood siding on exterior walls, and fiberglass shingle roof. Inside work included a drywall interior with batt insulation, tongue and groove hardwood floor, and 180 square feet of glazing (including windows, atrium-style exterior doors, and two operable skylights).
- Deck Addition cost $5,865 and returned $4,498 for 75 percent of the original cost. The work added a 16-by-20-foot deck of pressure-treated pine supported by 4-by-4 posts set into concrete footings. Included were a built-in bench, railings, and planter, all of pressure-treated pine.