Increases in Home Prices Indicate Now is the Time to Invest in Your Home
With improvements in the recovery of home prices, homeowners may be thinking about investing in improvements for their home.
Using the Homes.com Local Market report, we found select local markets across the U.S. that displayed significant year-over-year growth in home prices. Is this a sign of improving their overall state of recovery?
*Homes.com Local Market Index Report data ending January 2013
The state of recovery, as used in the Homes.com Local Market report, is measured by the percentage amount recouped from the peak-to-trough decline attributed to the bursting of the U.S. Housing Bubble. Dallas, TX, one of the selected markets, has more than completely recovered the loss attributed to the housing bubble and has added on 63% of the decline amount in price. Denver, Co follows next and has currently recovered 84% of the decline in home prices.
With many markets improving in home prices and the state of recovery, homeowners may be considering investing in and remodeling their home. What exactly is the cost of top home improvement projects?
According to a recent report from the U.S. Census[i], the number one home remodeling project performed by households in the United States is the bathroom, with 6.36 percent of households having work done in this area. This is followed by the kitchen with 3.71 percent of U.S. households.
The median cost for all home improvement projects in the U.S. is around $3,200[ii]. The median cost for the two most popular types of home improvements range from $2,432, for remodeling a bathroom, and $5,000 for remodeling a kitchen.
Real estate prices by market appear to influence the costs of home improvements. San Francisco, CA, an area well known for having higher home prices, currently has a median list price of $799,000 and home improvement expenditures are 113% more for a kitchen remodel while they are almost 230% more for a bath remodel (than the national comparison).
In addition to exhibiting the strongest signs of home price recovery, Dallas and Denver are also less expensive than the national median to remodel a bathroom. Perhaps this number one home remodeling project is a great improvement to consider in these local markets.
*Median Expenditure from the U.S. Census Bureau 2011 American Housing Survey; Median List Price calculated from active residential listings on Homes.com as of January 2013
Overall, the U.S. housing market is on its way to recovering from the burst of the housing bubble. This should help increase the real estate value for many homeowners, which will in turn allow them the ability to invest in home improvements without owing more than what the home is worth. Now may be the best time to invest in your home. For more on price trends in your local area, visit the Homes.com Local Market Index Report here.
[i] GfK Mediamark Research & Intelligence. LLC, New York, NY, Top-Line Reports (as provided by the U.S. Census Bureau Statistical Abstract of the United States: 2012)
[ii] U.S. Census Bureau, American Housing Survey 2011