3 Ways to Prioritize 11 Outdoor Remodeling Projects

With warmer weather on the horizon, many homeowners are gearing up for outdoor home improvements. But remodeling isn’t cheap. With thousands of dollars on the line, prioritizing projects is essential.

What’s the best way to set your priorities? The 2023 Remodeling Impact Report: Outdoor Features from the National Association of REALTORS® (NAR) Research Group examines three perspectives, using feedback from homeowners, real estate professionals, and landscape professionals.

The new report evaluates 11 outdoor remodeling projects, which can vary dramatically in size and scope. To help survey respondents provide consistent feedback, the project parameters were defined as follows:

1. In-ground pool addition – Install an 18-foot-by-36-foot in-ground pool with gunite walls, 3-foot to 7-foot depth, and a standard filtration system. Include a 3-foot-wide-by-4-inch thick concrete perimeter surround. ($90,000)

2. Landscape lighting – Installation of a standard 600W transformer and 20 LED lights. ($6,800)

3. New patio – Install a backyard 18-foot-by-16-foot concrete paver patio, dry set over compacted gravel and sand base. Paving material at $7 to $10 per square foot. ($10,500)

4. New wood deck – Build a 14-foot-deep-by-18-foot-wide wood deck attached to the house with a ledger. Decking, railing, and stair treads are constructed with cedar lumber. The stairs are 4 feet wide with an open riser. All cedar is finished with a clear deck sealer. The lower structure is covered with pine or fir lattice. ($16,900)

5. Fire feature – Install a dry stacked natural stone kit and gas burner with a 10-foot diameter flagstone patio. ($9,000)

6. Overall landscape upgrade – Install a front walkway of natural flagstone 3 feet wide and 30 feet long. Add two stone planters 6 feet long and 2 feet wide. Install five flowering shrubs and one deciduous 15-foot-tall tree. Mulch with landscaping bark. ($9,000)

7. Landscape maintenance – Annual mulch application, mowing of 2,835 square feet of lawn, pruning of shrubs, and planting approximately 60 perennials or annuals. ($4,800)

8. Irrigation system installation – Installation and management of irrigation system for a lawn that is 5,000 square feet. No boring is required. ($6,000)

9. Standard lawn care service – Includes six standard seasonal fertilizer and/or weed control applications on 5,000 square feet of lawn. ($415)

10. Tree care – Includes three applications of tree fertilizer, regular spraying, trimming, and pruning, as well as removing one 30-foot-tall tree. ($2,875)

11. Outdoor kitchen – Install one inset grill, stainless steel drawers, ice chest, sink, and 60 square feet of concrete countertop, made from veneered masonry stone. ($15,000)

Option 1. Joy Scores

Consumers remodel their homes for various reasons, and most are satisfied with the results. For example, after remodeling, owners report having a greater desire to be in their homes (68% of respondents), increased enjoyment in their homes (60%), feeling happy (52%), and feeling satisfied when they see their completed project (45%).

Source: National Association of REALTORS® 2023 Remodeling Impact Report: Outdoor Features

Consumers rated all 11 outdoor remodeling projects highly, with joy scores at or above nine on a 10-point scale. The top three projects were an in-ground pool addition (10), landscape lighting (10), and a new patio (9.9).

Even though the top three projects earned nearly identical joy scores, they differed significantly in terms of the most important result:

In-ground pool addition – Better meets homeowners’ needs (32%)

Landscape lighting – Beauty and aesthetics (45%)

New patio – Better functionality and livability (52%)

High joy scores play a crucial role in loving your home. But if you’re concerned about making wise financial decisions, it may be preferable to consider other methods for setting project priorities.

Option 2. Cost Recovery

Members of the National Association of Landscape Professionals (NALP) provided cost estimates for each project, averaging anonymous responses from national survey data. It’s important to note that every project is unique, and prices will vary depending on geographic region, property, and scope of work.

Remodeling typically improves a home’s resale value, but some projects provide a better cost recovery payback than others. Therefore, members of the National Association of REALTORS® were asked to define how much homeowners can recoup on each project upon selling a home.

Source: National Association of REALTORS® 2023 Remodeling Impact Report: Outdoor Features

Interestingly, the least expensive project—standard lawn care service ($415)—had the highest cost recovery (217%). In sharp contrast, the most costly project—in-ground pool addition ($90,000)—tied with a fire feature for the lowest cost recovery (56%).

Option 3. Recommended by REALTORS®

When a REALTOR® is representing a homeowner who wants to sell their property, the agent may suggest improvements to help the property attract a larger pool of buyers. Those recommendations often include outdoor remodeling projects.

(Note that the term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.)

Source: National Association of REALTORS® 2023 Remodeling Impact Report: Outdoor Features

Among the 11 projects included in the report, REALTORS® were most likely to recommend landscape maintenance (74%), standard lawn care service (53%), and tree care (44%). Landscaping-related projects may not earn the highest joy scores among homeowners, but they can dramatically improve a property’s curb appeal and suggest that the home is well maintained.

REALTORS® were least likely to recommend an irrigation system installation (2%), a fire feature (2%), an in-ground pool addition (1%), or an outdoor kitchen (1%).

Written by:

REBAC Staff. “3 WAYS TO PRIORITIZE 11 OUTDOOR REMODELING PROJECTS.” Homebuying.realtor, Real Estate Buyer’s Agent Council of the National Association of REALTORS®, 27 Mar. 2023, https://homebuying.realtor/content/3-ways-prioritize-11-outdoor-remodeling-projects?_cldee=r7GXExEInjU7KLhX3b96_JuNoZ0J3N9LufmZa0FDiL9A5i7ErF3qrEwlfRpLTZc2&recipientid=contact-302c93e0153b401db91dce54710dd0d7-4b448514dd474bca8fea8367a7242f16&esid=0c032dde-7ad9-ed11-9c76-00155d234439. Accessed 14 Apr. 2023.

Why Aren’t Home Prices Crashing?

There have been a lot of shifts in the housing market recently. Mortgage rates rose dramatically last year, impacting many people’s ability to buy a home. And after several years of rapid price appreciation, home prices finally peaked last summer. These changes led to a rise in headlines saying prices would end up crashing.

Even though we’re no longer seeing the buyer frenzy that drove home values up during the pandemic, prices have been relatively flat at the national level. Lawrence Yun, Chief Economist at the National Association of Realtors (NAR), doesn’t expect that to change:

“[H]ome prices will be steady in most parts of the country with a minor change in the national median home price.”

You might think sellers would have to lower prices to attract buyers in today’s market, and that’s part of why some may have been waiting for prices to come crashing down. But there’s another factor at play – low inventory. And according to Yun, that’s limiting just how low prices will go:

“We simply don’t have enough inventory. Will some markets see a price decline? Yes. [But] with the supply not being there, the repeat of a 30 percent price decline is highly, highly unlikely.”

As you can see in the graph below, we’ve been at or near record-low inventory levels for a few years now.

That lack of available homes on the market is putting upward pressure on prices. Bankrate puts it like this:

“This ongoing lack of inventory explains why many buyers still have little choice but to bid up prices. And it also indicates that the supply-and-demand equation simply won’t allow a price crash in the near future.”

If more homes don’t come to the market, a lack of supply will keep prices from crashing, and, according to industry expert Rick Sharga, inventory isn’t likely to rise significantly this year:

“I believe that we’re likely to see low inventory continue to vex the housing market throughout 2023.”

Sellers are under no pressure to move since they have plenty of equity right now. That equity acts as a cushion for homeowners, lowering the chances of distressed sales like foreclosures and short sales. And with many homeowners locked into low mortgage rates, that equity cushion isn’t going anywhere soon.

With so few homes available for sale today, it’s important to work with a trusted real estate agent who understands your local area and can navigate the current market volatility.

Bottom Line

A lot of people expected prices would crash this year thanks to low buyer demand, but that isn’t happening. Why? There aren’t enough homes for sale. If you’re thinking about moving this spring, let’s connect.