The housing market may have temporarily slowed down due to the global health pandemic, but that's no excuse for would-be sellers to skip updating areas of their homes in need of serious upgrades. Real estate has been deemed an essential business in many states. This means plenty of home buyers are still on the hunt, even if it means participating in virtual open houses to accommodate social-distancing mandates. Once lockdowns are lifted, we predict that the housing market will quickly rebound with a strong buyer demand met by limited inventory. "After sheltering in place for a month or more, people will be ready for change in their homes -- or looking for a new one," says Brian Lewis, a real estate broker with New York City-based realty firm Compass.
Sellers should know that most remodeling efforts only increase home values by 50% - 80% of the average project's costs, according to Remodeling magazine's 2020 Cost vs. Value report. For example, the average cost of a mid-range bathroom remodel is $21,377. You'd recoup about $13,680 (64%) of that amount during a resale. However, the cost of inaction can be far greater than the small loss you'll incur on any home-improvement projects. "Getting stuck in time with your home isn't a smart move and is rarely rewarded financially at sale time," Lewis adds. In fact, it may cause your house to linger on the market longer. As a result, you'll likely have to pay ongoing mortgage, maintenance and staging costs.
If you want to get the most bang for your buck, focus on features that most home buyers really want to see. Consumer tastes can vary by region, so consult with your real estate agent to find out which home features are in high demand in your area, advises Dr. Jessica Lautz, vice president of demographics and behavorial insights for the National Association of Realtors.
Updated for 2020, our slide show reveals those home features most coveted by today's buyers nationwide. Take a look.
Percentage of buyers who want this feature: 91%
Cost to install: $1,000 to $10,000 for a small-scale project
More than anything else, homeowners want a room other than the guest bedroom to stack all the clean laundry in until it finally gets put away. A separate laundry room tops the National Association of Home Builders' (NAHB) list of most-wanted home features by buyers. "Having a separate room [to use for things such as folding or ironing clothes] helps to keep the mess out of your living space . . . Potential buyers will see it as a huge benefit," says Paul Sullivan, founder and president of the Sullivan Company, a Newton, Mass., remodeling and custom-building firm.
If you don't have an existing laundry room and want to add one, the basement is usually the easiest (and cheapest) place to put it, Sullivan advises. The utility lines are already there, and in many cases the basement is unfinished, so you won't have to demolish anything first. Adding a laundry room in the basement can cost as little as $1,000, he says.
However, homeowners who prefer a laundry room or laundry closet (which fits just a washer and dryer) closer to the bedroom can expect installation to cost around $10,000, Sullivan notes. If you're looking to really ramp up your home's wow factor, the cost of a large-scale full laundry room (complete with a sink and storage cabinets) could easily surpass $15,000, he says.
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Energy Efficiencies (Appliances and Windows)
Percentage of buyers who want this feature: 89%
Cost to install: Varies by appliance
Would-be buyers looking to limit utility bills will be drawn to properties with Energy Star-qualified windows and appliances. "Gone are the days when these types of features were an anomaly. Today's home buyers expect energy efficiencies," Compass's Lewis notes. If you don't already have these features, examine your remodeling budget and decide where you can afford to spend.
Energy-efficient windows can trim heating and cooling costs by 12%, while individual appliances, such as an Energy Star-certified washing machine ($598 to $1,799 at Home Depot), can save homeowners $45 a year or more on their utility bills. Replacing an existing clothes dryer with an energy-efficient version could save as much as $245 over the appliance's lifetime.
Energy Star-qualified windows have an invisible glass coating, vacuum-sealed spaces filled with inert gas between panes, sturdier weather stripping than regular windows and improved framing materials -- all of which reduce undesirable heat gain and loss in the home. An Energy Star-certified dishwasher (ranging in price from $348 to $1,709 at Home Depot) uses soil sensors to assess how dirty your dishes are to minimize water use.
Once installed, sellers should be sure to play up these money-saving features in their home listings.
Percentage of buyers who want this feature: 87%
Cost to install: $1,024 per 120 square feet for a concrete patio
It's important for homeowners not to neglect the backyard area when prepping for resale, says Mike McGrew, chairman and CEO of McGrew Real Estate, a Lawrence, Kansas-based realty firm. In today's housing market, outdoor living spaces have become the most coveted outdoor home feature.
"When most buyers see a house with a really nice backyard, they start to envision themselves sitting outdoors with friends having drinks," McGrew adds. Also, outdoor areas offer more living space without the cost of a large-scale home addition.
With the popularity of home renovation reality shows, many buyers have come to expect the eye-catching features they see on TV in real life, NAR's Dr. Lautz says. Some of these shows, including DIY Network's America's Most Desperate Landscape and HGTV's Going Yard, focus on outdoor living spaces. Nowadays, home buyers envision everything from an outdoor fire pit area with seating to a backyard wet bar.
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Percentage of buyers who want this feature: 85%
Cost to install: $473 per fixture with light kit and remote control
In addition to improving a home's aesthetic, energy-efficient ceiling fans (ranging in price from $76 to $1,858 at Lowe's) can also help lower cooling costs when used in conjunction with an air conditioner during the warmer months.
Ceiling fans create a wind-chill effect that helps cool the people sitting in the room. Homeowners should be able to raise the thermostat level by four degrees without a reduction in comfort while the fan is in use, according to Energy.gov.
Energy.gov also recommends that ceiling fans only be used in rooms with a ceiling height of at least eight feet. The fans work best at that height and when they're hanging 10 to 12 inches below the ceiling.
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Garage Storage Space
Percentage of buyers who want this feature: 85%
Cost to install: $2,025 - $2,363 for 380 square feet
Buyers with growing families need lots of storage space. Would-be sellers should keep in mind that "streamlined living equates to more dollars in your pocket at sale time," Compass's Lewis says. This will be crucial in the months ahead once the housing market begins to normalize and homeowners access the practicality of their existing living areas, he adds. Carving out some space in your garage to help keep clutter out of the main level could help your bottom line. "Make sure the bonus space is easily accessible and wonderfully organized," Lewis advises.
Unlike an attic or a backyard shed, the garage is accessible -- generally, just a few steps away from the rest of the house -- making it easier to transport items such as tools, patio chairs or boxes to and from other parts of the house.
The installation cost listed here includes adding cabinetry and shelving, peg wall boards for tool storage, overhead lighting and additional electrical circuits.
Percentage of buyers who want this feature: 85%
Cost to install: $66.77 per fixture
Illuminating a well-manicured lawn with exterior lighting can help grab potential buyers' attention before they even set foot in the front door. In fact, exterior lighting is the second most-wanted outdoor feature (patio was first), according to the NAHB report. Options include spotlights, walkway lights and pendant lights.
Aesthetics aside, exterior lighting also serves as an added safety feature for your home, says Daniel Hurst, owner and general manager of Hurst Design-Build-Remodel, a Middleburg Heights, Ohio-based home remodeling company. Motion-sensor lights, for example, turn on automatically whenever there is movement outside your house.
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Percentage of buyers who want this feature: 83%
Cost to install: Varies based on design
A walk-in pantry is the most-coveted kitchen feature among buyers polled in the NAHB's report. Why? Home buyers with families know that the kitchen can quickly become overcrowded when there's not enough space to store the essentials (think: canned goods, condiments and food storage containers). And those that shop in bulk at warehouse clubs or big box retailers to avoid having to make frequent trips and face in-store crowds will need extra space in the kitchen area to store their goods.
Unlike reach-in closet pantries with sliding doors that offer limited space, walk-in versions allow homeowners to store larger quantities of non-perishable food items and other kitchen essentials just steps away from the food prep area, suggests Neil Parsons, a project designer for Move or Improve, a Matawan, N.J.-based home design firm.
Walk-in pantries are typically 5x5 feet and have U-shaped open shelves or cabinets with a countertop, according to ThisOldHouse.com. Make sure the pantry is situated somewhere that is cool and dry.
Percentage of buyers who want this feature: 83%
Cost to install: $1,800 per 120 square feet to lay and finish hardwood floors
Hardwood flooring offers a cleaner look, is easier to maintain and is more durable than carpet, which needs to be replaced every 8 to 10 years. "Hardwood can be refinished periodically and lasts a lifetime," Sullivan says.
Sellers on a budget may want to buy engineered wood flooring (which is a hardwood veneer wrapped around several layers of plywood, fiberboard and hardwood). You can expect to pay about $1,200 to install 120 square feet of prefinished wood flooring -- nearly 15% cheaper than pure hardwood flooring.
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Walk-In Closet (Master Bedroom)
Cost to install: Varies by design
While walk-in closets aren't among the top demands of all homebuyers, they're highly sought after among first- and second-time homebuyers, according to the NAHB. A walk-in closet in the master bedroom ranked among their top five features.
If you live in an older dwelling with a reach-in closet, it may be time for a revamp if you're considering putting it on the market. Couples generally want a closet with more space, because they'll be sharing it, suggests Maria Zamora, a real estate agent based in Addison, Tex. Meanwhile, singles might desire the flexibility of being able to store their personal belongings -- from clothes and shoes to jewelry and other accessories -- in one place, while keeping them organized. "Homes without a walk-in-closet in the master bedroom are more of a challenge to sell and generally attract less buyers," Zamora says.
For would-be sellers with older homes that have less space, a full closet renovation in the master bedroom may not be practical. However, you still have options that will help make your property more appealing. Update an existing reach-in closet by installing an organization system complete with shelving units and hanging rods for clothes. You can purchase a prefabricated system from IKEA, which range in price from $129 to $1,769. To save some cash, you can go the DIY route and install it yourself. Or, you can have an IKEA professional do the job for you for an additional fee. You can also hire a consultant from a custom closet design firm, such as The Closet Factory, to assess your space and design an organization system that fits your needs. The cost will vary based on your requirements.
If you're an empty-nester, you could even turn a nearby smaller room into a custom walk-in closet. Depending on the quality of the materials used (for example, solid wood shelving vs. wooden veneer shelving), this type of project could range in price from $1,000 to $6,500, according to HomeAdvisor.com.
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Cost to install: Varies by design and structural needs
Eat-in kitchens are a must-have for second-time home buyers who were polled by the NAHB. They're especially attractive to families with children. It's a space where they can congregate in the morning for breakfast or in the evening for dinner so everyone can share highlights from their day.
Removing a non-load-bearing wall to create space for a small table and chairs in your kitchen is relatively inexpensive (as little as $1,000), but that price can quickly escalate if your demolition reveals plumbing, duct work and electrical wiring that needs to be removed, Move or Improve's Parsons says.
If you're on a tight budget and can't afford to knock out a wall to create more space for a table and chairs, consider adding a center island with room for bar stools, he suggests. You can purchase prefabricated kitchen islands with space for seating at Home Depot (starting at $309) and Lowe's (starting at $286).
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Cost to install: $5,800 - $6,800 to renovate a 190-square-foot existing space
In recent years, formal dining rooms (and closed floor plans) have taken a backseat to open floor concepts in today's home models. While these layouts help maximize space, there are still home buyers who desire the charm and unique features that come with older homes. This includes a separate dining area distinct from the kitchen. In fact, a separate dining room is among the top 10 essentials for first- and second-time home buyers, the NAHB reports.
With open floor plans, "many people have seating at their kitchen island and will have a quick bite to eat informally," says Shannon Lynch, a real estate agent with Savvy + Co. Real Estate, a Charlotte, N.C.-based realty firm. "Sitting down in a dining room has a sense of importance to it . . . It makes your guests feel special," she adds. This is especially true during holiday gatherings or sit-down family dinners. If you have an older home with a closed floor plan, it may be time to modernize your dining room area to help attract buyers. The cost listed here for a small-scale remodel includes installing new flooring, doors, switchplates, decorative hardware and recessed lighting. Many of these features come standard in newer home models.
If your home has an open floor plan, there are still ways to create a dining space that feels separate. You can add an over-the-table lighting fixture or incorporate a tray ceiling to help define a particular area of the main living level -- perhaps just off the kitchen. Another option: Install decorative columns instead of a solid wall. Adding the tray ceiling or decorative columns can cost as much as $6,000 and includes materials, installation and labor, Parsons notes.
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Copyright 2020 The Kiplinger Washington Editors