A newly remodeled kitchen, bathroom or even a deck can add value to your home and comfort to your lifestyle. That's why last year's home improvement figures hit a record high.
"For 2004 we estimate that the market was $271 billion … . The growth rate over the last five years has been 6.9 percent per year," says Fred Miller, managing editor for Home Improvement Research Institute , HIRI, based in Tampa, Florida.
HIRI tracks what people spend on materials, not the labor costs involved in home improvements, so the true total is even larger. The $271 billion recorded last year in home improvements is the highest that the company has seen since it started gathering research in 1984.
Remodeling projects that provide the greatest return on investment are:
- bathroom additions
- second-story additions
- kitchen/bathroom remodels
- new roofs
- family room additions
- master suite additions
Return on investments for those types of projects range from 80 percent to as high as 90 percent depending on the location and specific remodel job.
Home improvements are typically triggered by a few primary factors: housing turnover, maintenance and natural disasters, such as the devastating hurricanes that hit Tampa, Florida in 2004.
"There is a strong underlying trend of discretionary upgrades, driven in part by the active housing market and the baby boom generation in its peak earning years. But there is also the repair and replacement side of remodeling, fueling the industry from year to year, driven by the aging housing stock, as well as damage from accidents and disasters," says Miller
HIRI estimates that product purchasing for home improvements will climb to $287 billion this year.
"People will spend money on their new home when they first get it to fix it up and get it the way they want it and people will spend money on their old homes to get them ready for sale," says Miller
Still the most significant reason people improve their homes is to make them more comfortable and beautiful.
Among people remodeling kitchens, "82 percent of the people surveyed wanted to beautify their homes, while 60 percent were hoping to increase the value of their homes," says Miller
As for bathrooms, the figures were 76 percent and 54 percent respectively. In high-end kitchen and bathroom remodel projects the figures jumped up about 10 percent in the category of hoping to increase the value of their homes.
As those who have been through it can attest, most home improvement projects aren't a quick turn. Instead they can be a long, laborious process.
"In terms of how long it takes people to do them, we found something interesting in the kitchen remodeling; average time from the time they started to think about the project until they actually completed it was 13.3 months, but it grew to 20.4 months for those who did a higher-end kitchen. The big difference in time came in more time for planning," says Miller.
The good news is that most people seemed to be satisfied with their chosen home improvement.
"What we see in this research is there is a very high level of satisfaction with most projects. Even throughout the project it's pretty good; there's good levels of satisfaction with the completion. The roughest part, as you might expect, is during the project," says Miller.
