As a result of the changing housing market and economic conditions of the past two years, many construction companies have had to reevaluate their method of operation. Of course cost cutting is a part of this, but it also includes evaluating which project markets to target.

According to this article posted in the December 2007 Cost vs. Value Report printed by Realtor Magazine, exterior and replacement projects are currently bringing the highest rate of return. They conducted a survey amongst realtors in over 65 districts aimed at comparing construction costs versus the return on investment. Out of all of the projects analyzed, the only interior project that ranked well was a minor kitchen remodel yielding a return higher than 80%. Other than that, strictly exterior projects took the cake. Overall, siding replacement, wood decks, and window replacements paid-off the best.

As this August 26, 2008 Associated Press Article points out, housing prices are continuing to fall drastically. This can be concerning for contractors, but really only reinforces the need to be sure your efforts are focused in the right areas. On a more encouraging note this article, “Consumer Outlook Up, Housing Bottom May be Near,” also appeared today, offering support for continued remodeling in preparedness for a better market next year.

Knowledge of the areas reaping the greatest returns will aide in advising your clients as well. It is important to keep in mind, as this article is quick to point out, that this data varies based upon the region and the projects studied. Situations vary depending on different demographical influences. It may be advantageous for you to consult local realtors and appraisers to see what trends are influencing your area.

This entry was posted on Thursday, August 28th, 2008 at 11:47 am and is filed under Contractor Marketing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.