Archive for the 'Simsbury' Category

Remodeling Cost versus Value

The November 2009 issue of Remodeling Magazine included the 22nd edition of their annual report about the financial impact of various home improvement projects. They look at both midrange and upscale projects, and hit on all the major renovations, calculating the percentage of the cost that could be recovered in a sale. Data is broken down by region and even by major cities within a region. I was excited to discover that Hartford is one of the cities profiled, meaning that the data is specific to our area. Check out the complete list of projects and paybacks for Greater Hartford on the Cost vs Value Website.

There is lots of interesting data – here are some observations after poking around the various reports:

- Most projects allow homeowners to recoup between 60% and 80% of their cost. Basically this is saying that it is not appropriate to think about renovations as “investments” since they will rarely increase the value of a home by more than the cost of the project. Sellers sometimes think that they should recover at least 100% of the value of recent projects. Every situation is different, so in some cases that may be true, but in general remodeling projects do not “pay for themselves” except when the owner’s enjoyment of the finished work is factored in.

- Most of the projects with higher payback percentages are structural renovations that have little opportunity to customize. For example, siding and window replacements rank highly. On the other hand, projects that are often very specific to the owners bring a lower payback. Examples here include a sunroom addition or a home office renovation.

- At the national level, payback amounts for most projects have decreased since last year. However in the New England region paybacks have actually increased for most projects, though the report doesn’t try to explain why this might be true. Perhaps the data simply reflects the fact that the housing stock in New England is older than in other parts of the country so renovations are more important here.

- Payback amounts are generally higher in the Hartford metro area than in the New England region, which are in turn higher than the national averages. Renovation projects are apparently very cost effective in our area – good news for us! Three projects return an average of more than 100% in Greater Hartford (siding replacement, converting attic space to a bedroom, and replacing the front door).

Check out the full report to see the specifics for any projects that you’re considering. The key message that the study sends is that each dollar spent on the average remodeling project translates into less than a dollar of increased value for your home. That being said, the payback for every project is going to be different. It will be based on the needs of your home and specific decisions made within the project.

Regionalism in CT

This Sunday’s Courant contained an excellent editorial about regionalism as a possible strategy for addressing the financial challenges our numerous local governments face. It is a very helpful piece because it not only introduces & defines the idea, but also looks at pros & cons. Finally, the article cites other US metropolitan regions that are already making strides with this strategy and articulates first steps for Greater Hartford.

Town finances impact all of us (even renters) through property taxes. They are a hot button issue for the traditional pro-school and anti-tax groups that emerge every time a budget comes up for debate. There is always lots of rhetoric, and there is sometimes cooperation and compromise, but there are rarely constructive suggestions or discussions that address the underlying issues. Which is not surprising because the established rules of the game are that everything is local.

The Greater Hartford Real Estate Blog has written about the financial stresses that local governments face on a couple of occasions. One post focused on West Hartford’s ongoing budget situation, while the other was more general and looked at the difficult economics of running a town. We see financial trouble on the horizon at all levels of government. And like many others have not been sure how best to work within the rules.

Rather than continuing to beat each other up at a local level, another way to address the challenges is to team up at a state and/or regional level and try to work together. The Courant has stepped to the front by making an initial proposal that includes the following:

1. Launch a study at the state level to identify whether or not core services can be more efficiently delivered on a regional basis (with the focus on federal metropolitan areas rather than counties).

2. Begin dialogs about regionalism at the town level immediately, and launch a major education campaign if the state study shows meaningful savings are possible.

3. Create incentives at the state level to encourage towns to participate.

4. Consider enhancing the existing entities that already think on a regional level so they can play more of a leadership role.

Regionalism is a new arrow in our quiver as we all go through the local budget balancing process. It joins tax hikes, reduced services, begging for more state money, and increased efficiency as the primary tools for making sure that town revenue matches town expenses. And of the five, it seems most likely to make a meaningful long-term impact.

So give the editorial a quick read. Talk about it with your friends, neighbors and coworkers. And if it seems as promising to you as it does to us, tell your elected officials to reach out to their counterparts in other towns.