As you plan your next renovation project, it’s more critical than ever to know what upgrades increase home value. The world looks a lot different in 2022 than it did a couple of years ago, and our homes have been at the center of massive change and re-evaluation.
Home offices and outdoor spaces, for example, are now extremely coveted features. Our newest list of home improvements that add value takes these recent trends into account and incorporates specific product suggestions updated for 2022.
Although Harvard researchers estimate that Americans’ total spending on home remodeling projects could reach $430 billion by the second half of 2022, that growth could taper off in the third quarter because of rising costs of construction materials, labor, and interest rates, they say. Annual inflation of 7% (the highest recorded since 1982) is making everything more expensive, including the cost to put in new floors or refresh your dated bathroom.
According to a survey of real estate professionals by Remodeling magazine, the average cost recouped on 22 popular remodeling projects came in at about 60% nationally in 2021, down from 63.7% in 2020 and 66.1% in 2019. A report from Harvard’s Joint Center for Housing Studies echoes that residential maintenance and repair costs rose 21.5% from 2020 to 2021 in response to supply chain issues and raw material shortages.
But that doesn’t mean you should stop investing in your home. If you haven’t noticed, real estate values have performed amazingly well during the pandemic — CoreLogic found the average homeowner gained approximately $56,700 in equity in the year preceding Q3 2021 alone.
Convert or build a home office
Since 2009, the number of people who work from home has risen by 159%, according to stats from Global Workplace Analytics. In a Fall 2021 survey by HomeLight, 60% of top real estate agents cited a home office as a top priority for buyers in their market, representing a higher percentage of respondents than any other home feature or quality on the list.
Buyers care about a home office more than they care about whether the home is move-in ready or is of a minimum square footage, our survey found. In some cases, buyers are seeking out multiple home offices.
Creating new space or dedicating existing space to a home office is likely going to be a good investment if you’re in a market with a decent amount of people who telecommute. Mid-2020 data from HomeLight indicates that a home office adds over $10,000 in resale value, and that number may be even higher now as Americans settle further into their remote work routines.
Creative options could be converting a walk-in closet into a functioning office or, on the more expensive end, building a backyard ADU (accessory dwelling unit) or extension to make room for one. The estimated value an ADU adds to a property has increased from $47,600 to $66,000 since pre-pandemic times.
Get a door of steel
Replacing an existing entry door with a steel one has recovered anywhere from 65% to 91% at resale over the past four years, statistics show. Buyers appreciate the energy efficiency, low maintenance, and cold-blocking powers of metal.
Replace your garage door
Garage door looking a little dingy on the outside or making strange noises? Or perhaps the style is now dated compared to what your neighbors have? A new garage door is also likely to be worth the investment. According to HomeLight’s research, top agents say a new garage door costs an average $1,200 but adds an average $2,797 in resale value for a 133% ROI.
Put in a fire pit or outdoor fireplace
When it comes to what features buyers like to see in an outdoor space, 54% of top real estate agents HomeLight surveyed cited a fire pit as one of their top priorities. This provides a cozy setup for friends and family to gather even when the evenings get chillier. A separate survey also found that outdoor fireplaces have increased in value since March 2020, from adding an average $3,300 dollars in value to over $5,700 in value since the pandemic began.
Add an outdoor kitchen
Once viewed as an add-on reserved for luxury homes, these days, it appears everyone wants an outdoor kitchen. In addition to a built-in grill, outdoor kitchens often include features such as cabinets, a bar, a sink, standard kitchen appliances, and sometimes a flat-screen TV. They can be lavish or basic, depending on budget. The value an outdoor kitchen adds to a home has increased from an estimated $6,100 pre-pandemic to $9,800 in the current market.