Hardwood flooring retailers and contractors have long known that hardwood flooring is an aspirational product. Now RSAs have another talking point: A National Association of Realtors (NAR) study found that hardwood projects generate higher profit margins. More specifically, refinishing hardwood floors, as well as installing new wood flooring, generated the highest returns on investment—higher than a new kitchen or bathroom upgrade or any other project.
In its study, NAR provided an estimate of the likely dollar value each project would add to a home at resale. In comparing that dollar value to the estimated cost of each project provided by NAR members, a “recovered project cost” percentage was calculated.
For interior projects, the highest percentage cost recovered was from refinishing hardwood floors (147%), followed by new wood flooring (118%). The study calculated a $3,400 homeowner investment in a hardwood flooring refinish, with a $5,000 estimated cost recovery. For new wood flooring, homeowners would spend $5,500 and recoup $6,500. By comparison, a kitchen upgrade garnered a 67% cost recovery.
NAR sought consumer views upon completion of their new wood flooring project. Among the key findings, 90% said they have a greater desire to be home since completing the project; 77% said they have an increased sense of enjoyment when they are at home; and 61% felt a major sense of accomplishment when they think of the project.
Flooring professionals welcomed the survey as confirmation that flooring is a great investment for homeowners. “This information will certainly help and is extremely valuable,” said Ted Kozikowski, CEO of Galleher, a top 5 distributor whose portfolio is heavily skewed toward hardwood flooring. “It is a plus anytime we can quantify a large investment for a customer and demonstrate a strong return on investment.”
Flooring retailers agreed that any positive information about their industry from a trusted source is more fodder for RSAs. “We can definitely use those statistics in our sales presentations to homeowners to show that hardwood flooring is an actual investment in their home that they should be able to more than recover should they ever sell their home,” said Ted Gregerson, president of Ted’s Floors & Beyond, based in Anniston, Ala.
The NAR survey is particularly relevant when it comes to higher-end homes, where real wood floors are more prevalent, according to Steve Weisberg, president of Crest Flooring, Allentown, Pa. And Bryan Park, CEO of Footprints Floors, a Hauppauge, N.Y.-based installation company, said a new floor can completely revitalize a home, which is why it has such lasting value. “Kitchens and bathrooms are often the first rooms to get a remodel, but investing in flooring can pay dividends for years to come,” he said.
NAR is not alone in its conclusions. One estimate provided by ProBuilder magazine, a trade publication that reaches specialty contractors and installers, put the customer’s return on investment for a hardwood floor between 70%-80%. For example: If the homeowner spends about $15,000 on a hardwood flooring installation, she could stand to recoup at least $10,000 if/when she decides to sell the home— extenuating circumstances and current market conditions notwithstanding.
