The report indicates that most of the projects increased in price during the pandemic. The three home projects that marked the largest increase in costs were additions (49%), closets (38%), and cabinetry (30%). Aside from the initial sticker shock, this type of work is not surprising because so many homeowners scrambled to reconfigure or add to their home for additional space and storage for their families during lockdown.
The projects that actually saw a decrease in price in 2020 were computer networking, smart-home systems, and above-ground pools, which dropped 10%, 37%, and 43%, respectively.
Why homeowners decide to take on projects
The wide range of prices listed above shows that deciding on projects likely had less to do with cost and more to do with what the homeowners either needed or wanted. The report defines the top 20 projects based on their impact on the home:
- Visual value: These projects offer big visual impact for a relatively low price, such as interior painting or new flooring.
- Lifestyle value: These projects are popular but expensive, such as a kitchen or bathroom remodel.
- Lifestyle utility: These are low-cost projects that are utilitarian, such as a new pantry or roof. Though they are useful and relatively cheap, they are not as popular for homeowners to complete.
- Luxury/necessity: While these projects might be highly desirable, they are unpopular because of their large scope and high cost, such as an in-ground pool or a home addition.
It’s important to realize that a low price tag does not automatically make a project popular, nor is a high price tag a deal breaker. An investor should plan property renovation projects accordingly, as having any of these top 20 projects already completed could catch the eye of more homebuyers.
Hiring a professional vs. DIY
Contractors were certainly in demand during COVID-19, but there were also quite a few DIY projects in progress as well, likely because homeowners finally had the time for projects they had been putting off. But at what point does a homeowner decide a project needs a pro instead of doing it on their own?
While the final decision will vary by household and project, Fisher says, “A good rule of thumb is that unless you have the time, tools, and talent to do the job yourself, you’re better off bringing in a professional.”
There’s a bit of a generation gap as to who decides on DIY vs. hiring a pro: Homeowners 55 and older are 50% more likely to leave the work in the hands of a pro than younger millennials between the ages of 25 and 34.
Says Fisher, “I think this is largely a result of those in the older age group having more experience with home projects and the wisdom to know when it’s best to just hire someone up front. Even small jobs can require a lot of expertise to do them really well.”
The bottom line
Amid other shutdowns during the pandemic, the home-improvement industry was booming. Where DIY wouldn’t cut it for home projects, homeowners hired contractors and paid a premium for materials. Homeowners saw value in the projects, whether they were aiming to optimize their spaces for a better work-from-home experience or gearing up to take advantage of a hot seller’s market. Investors can use the True Cost Report to see what matters most to homeowners and what they should focus on in their own fix-and-flip properties.