Wondering if replacement windows are worth the investment? Here’s a short answer: Yes they are. Compared to other remodeling/renovation projects, new replacement windows have a compelling ROI. In fact, in terms of added resale value, replacement windows add more value compared to cost than major kitchen remodels, backyard patio projects, and master suite additions.
But just how much will replacement windows add to your home’s value?
Take a look at Remodeling magazine’s 2019 Cost vs. Value report. The annual report highlights the value added by common remodeling projects in the U.S., and vinyl and wood replacement windows have a high ROI in 2019. According to the report, vinyl replacement windows add $12,332 to your home’s value, while wood windows add $14,530. (Both are estimates for replacing ten windows.)
Ultimately, the increase in resale value for a window replacement project is determined by several factors, including the local real estate market, average costs, and even your neighborhood. The good news: Baltimore and the South Atlantic region tends to perform at or slightly above national averages.
WINDOW REPLACEMENT Projects: Estimating ROI
When estimating the ROI of window replacement, there are a few things to keep in mind. Your city or neighborhood, for example, can affect the value a project creates. Similarly, the cost of materials – which have risen in the last year – is another thing to keep in mind.
To the left is a graph representing the share of remodeling costs recouped at resale in the United States in 2019, by the project. For more information about this research visit this link.
Here are a few factors to consider:
- Cost-to-Value Ratio – The report compares a project cost to the value it creates. Window replacement projects, for example, recoup about 70% of the expenses in added resale value. Historically, the amount of window replacement projects has grown more quickly than prices. In 2019, the value of vinyl windows increased by 7.9% year-over-year, while costs rose just 5.9%.
- “Façade Facelifts” – Exterior projects – like new windows or stone veneer cladding – outperform most interior projects. The reason? Curb appeal is a significant factor when estimating resale value. Therefore, projects that add curb appeal and help create better first impressions – like new windows – tend to perform better. 9 of the top 10 projects in 2019 were exterior updates, including windows.
- Local Market – Cost-to-value ratios vary by location and real estate market. For example, in San Francisco, many projects recoup 100% of costs, due to the city’s housing shortage and high housing costs. In desirable neighborhoods, for instance, a project could potentially generate more significant value than it would in less in-demand neighborhoods. Regional differences also affect project costs.
- Replacement vs. Remodeling – Finally, replacement projects typically outperform remodels. This is due to costs. Alternatives – including entry door, garage door, and windows – have lower prices but add significant value, resulting in more compelling ROIs.
Ultimately, windows rank highly in terms of ROI. Compared to costly remodeling and renovation projects, window updates tend to recoup a much higher percentage of cost right off the bat. For example, an upscale kitchen remodels recovered just 59.7% of the expenses in 2019, while adding vinyl replacement windows added 73.4%.
REPLACEMENT WINDOWS AND INCREASE IN RESALE VALUE IN 2019
Looking more closely at the cost-to-value ratio of new windows, you can see that this type of project generates one of the best ROIs of any major remodel or replacement project.
On average, vinyl window replacement projects recouped 73.4% of the average $16,802 project cost. Wood windows also performed well generating a 70.8% return on the $20,526 project cost. Regionally, these projects performed well too. In the South Atlantic region – which includes Baltimore, MD – window replacements slightly underperformed national averages, recouping 72.3% and 68% respectively.
Besides, new windows help to lower heating and cooling costs. In fact, according to EPA estimates, updating single-pane windows with new double-pane windows can result in up to $465 in cost savings per year. Therefore, homeowners can expect to recoup 100% of a window replacement project within 5-7 years.
Bottom Line: REPLACEMENT WINDOWS Are Worth the Investment
Updating the windows on your home is a significant investment, but fortunately, this type of project offers a compelling ROI. Instantly, your home will have higher resale value – especially in in-demand neighborhoods and cities – and help enhance your home’s curb appeal. Plus, due to the efficiency of new windows, homeowners can expect to save nearly $500 a year in reduced heating and cooling costs.
In short, if you plan to sell your home in the next 3-5 years, installing new energy efficient windows can help you maximize resale value. And historically, this has been a safe investment, as the amount of this type of project continues to increase more quickly than costs.