If you own your home, you might be tempted to make some home improvements in the coming months. Some of these could be for your own enjoyment or to make your home feel more uniquely yours. Others could be for practical reasons, such as to boost the overall value of your property — a boon if you plan to sell anytime soon.
But while some home renovations are worth doing, others can be more expensive than they’re worth. This is in no small part due to high inflation, labor shortages, supply chain issues, and similar factors keeping costs high.
Before you add on an entirely new room to your house or install that outdoor swimming pool, make sure it’s really worth the cost. If you’re not careful, you might not get as great of a return on your investment as you think — if you get any at all.
An in-ground swimming pool might seem like a great idea if you experience long, hot summers where you live. But this renovation project can quickly become costly.
“I would hit pause on adding an in-ground pool. Depending on the type of soil where you live, excavation costs alone stack up to tens of thousands of dollars,” said Omer Reiner, licensed Realtor, entrepreneur, and president of FL Cash Home Buyers, LLC.
Not only do you have to deal with excavation and installation fees, but you also have to consider maintenance and insurance costs with swimming pools.
“They don’t always make potential buyers later smile because of the costs to keep it up and the extra home insurance that would be needed,” added Reiner.
“The most impactful home renovations have changed over the years,” said Erin Sykes, chief economist, real estate advisor, and real estate agent at Nest Seekers International. “The ones that bring ROI include interior/exterior painting, adding a pool (in certain markets), and adding custom closets.”
But one expensive home renovation project Sykes did not recommend was adding a breakfast nook.
Having a breakfast nook can seem appealing, especially if you have a relatively small dining area. But if you want to build one into your bay window or off the side of your kitchen, expect to spend up to $8,000 on the project — depending on the materials used and the size of the nook.
While you might think that having a breakfast nook can add value to your home, there’s no guarantee that it will. And if the quality isn’t there, or if the aesthetic doesn’t match the rest of your living space, a potential buyer might be turned off by its existence.
Additional Square Footage
The median home size for single-family homes across the U.S. is 2,480 square feet. However, there are plenty of homes that are much smaller than that.
If you have a relatively small home, you might be tempted to add on an additional room or expand an existing one to make your home bigger. But this home renovation project might not be worth the cost by the time you’re done with it.
“Adding square footage in a sunroom or extra bedroom won’t find you recouping costs,” said Reiner. “While reconfiguring your current space can add appeal that could pay off later, the enormity of a room addition, especially if it just brings your home to a comparable space for your area, will be a financial loss.”
According to HomeAdvisor, the cost of a single square foot can range from around $80 to $200 when you account for labor and materials. If you’re adding on to a second or third story, prices go up to $300 to $500 per square foot.
Say you want to add on a room that’s 100 square feet, which is roughly the size of a small bedroom. This addition could cost anywhere from $8,000 to $20,000. If your home value doesn’t increase by at least that much, you won’t recover the costs.
Garage Bay Addition
You might also want to avoid adding on another garage bay, said Reiner.
Although an additional garage bay can give you more storage space and protect your vehicle, a simple one can easily cost $5,000 to $10,000. Depending on factors like size, materials, and labor, you could be spending much more than that.
Not only that, but you’ll need to consider the layout of the addition. If, for example, the garage bay doors are on the side, you might need to reconfigure your driveway layout.
You might also need to get certain permits or meet zoning requirements before you can add one. This could mean having to pay more fees.
Built-in Entertainment Systems
If you love listening to loud music, watching theater-quality films, or hosting events at your place, you might be thinking about installing a built-in entertainment system or media console in 2024. But while this might be a good idea for personal use, it won’t necessarily help if you’re trying to sell your home in the future.
The cost of a built-in entertainment system can easily range from a few thousand to $10,000. Larger systems, such as floor-to-ceiling or custom-built ones, can cost even more than that.
“Built-ins like media consoles have become passé and will likely not add any value to your home,” said Sykes. Some potential buyers might enjoy a built-in system like this. But you also run the risk of losing prospects who want to do the customization themselves after purchasing your home.
Bottom Line
If you’re considering a home renovation project in 2024, think about the total cost and time commitment of that project. Ask yourself why you want to do it, and whether you plan to sell your home in the near future. Depending on your answers, it might not be worth the money.
And if you still want to make some changes, go with low-maintenance or eco-friendly additions that appeal to most buyers. Give your appliances a face lift, splash on a new coat of paint, or upgrade your curb appeal. These are the types of things that can add value to your home without the hefty cost.
TORONTO – One expert predicts Ottawa‘s changes to mortgage rules will help spur demand among potential homebuyers but says policies aimed at driving new supply are needed to address the “core issues” facing the market.
The federal government’s changes, set to come into force mid-December, include a higher price cap for insured mortgages to allow more people to qualify for a mortgage with less than a 20 per cent down payment.
The government will also expand its 30-year mortgage amortization to include first-time homebuyers buying any type of home, as well as anybody buying a newly built home.
CIBC Capital Markets deputy chief economist Benjamin Tal calls it a “significant” move likely to accelerate the recovery of the housing market, a process already underway as interest rates have begun to fall.
However, he says in a note that policymakers should aim to “prevent that from becoming too much of a good thing” through policies geared toward the supply side.
Tal says the main issue is the lack of supply available to respond to Canada’s rapidly increasing population, particularly in major cities.
This report by The Canadian Press was first published Sept. 17,2024.
OTTAWA – The Canadian Real Estate Association says the number of homes sold in August fell compared with a year ago as the market remained largely stuck in a holding pattern despite borrowing costs beginning to come down.
The association says the number of homes sold in August fell 2.1 per cent compared with the same month last year.
On a seasonally adjusted month-over-month basis, national home sales edged up 1.3 per cent from July.
CREA senior economist Shaun Cathcart says that with forecasts of lower interest rates throughout the rest of this year and into 2025, “it makes sense that prospective buyers might continue to hold off for improved affordability, especially since prices are still well behaved in most of the country.”
The national average sale price for August amounted to $649,100, a 0.1 per cent increase compared with a year earlier.
The number of newly listed properties was up 1.1 per cent month-over-month.
This report by The Canadian Press was first published Sept. 16, 2024.
MONTREAL – Two Quebec real estate brokers are facing fines and years-long suspensions for submitting bogus offers on homes to drive up prices during the COVID-19 pandemic.
Christine Girouard has been suspended for 14 years and her business partner, Jonathan Dauphinais-Fortin, has been suspended for nine years after Quebec’s authority of real estate brokerage found they used fake bids to get buyers to raise their offers.
Girouard is a well-known broker who previously starred on a Quebec reality show that follows top real estate agents in the province.
She is facing a fine of $50,000, while Dauphinais-Fortin has been fined $10,000.
The two brokers were suspended in May 2023 after La Presse published an article about their practices.
One buyer ended up paying $40,000 more than his initial offer in 2022 after Girouard and Dauphinais-Fortin concocted a second bid on the house he wanted to buy.
This report by The Canadian Press was first published Sept. 11, 2024.
