Window replacement costs still justify ROI

These days, it seems we pay more for less. As the economy has downshifted, so has the return on investment of many home improvement projects. Replacement windows are no exception; though prices have gone up over the past year, the value recouped from the project has gone down.

What to expect from window replacement cost

According to Remodeling Magazine's Cost vs. Value Report for 2010-2011, the cost of replacement vinyl windows has risen slightly, but the amount recouped in resale value has dropped. In 2011, replacement window cost for ten vinyl windows was $11,066, while the cost for wood windows was slightly higher at $12,027. In the 2009-2010 report, costs for the same replacement windows were $10,728 and $11,700, for an increase of $338 and $327, respectively.

However, the amount of investment recouped has been in steady decline. Between 2010 and 2011, the cost recouped from the replacement windows dropped from 76.6 percent to 71.6 percent for vinyl windows, and from 77.3 percent to 72.4 percent for wood windows.

The situation was the same even when the project moved from mid-range to upscale. For an upscale project, including windows with custom colors and energy-efficient options, the cost in 2011 was $14,284 for ten vinyl windows and $18,226 for wood windows. In 2010, the cost was $13,862 for vinyl windows and $17,861 for wood windows. That is a difference of $422 and $365, respectively.

The loss in recouped investment dropped at about the same rate for upscale projects as it did for mid-range window replacement. The amount recouped from a vinyl window replacement dropped from 76.5 percent in 2010 to 72.6 percent in 2011, while wood windows dropped from 71.5 percent to 67.5 percent.

How to make the most of your replacement windows

The trend of higher prices has not been constant over the years--in 2007 and 2009, prices dropped slightly from their peak in the previous years--but the trend toward recouping less money from the investment has held steady since 2006. This could be a reflection of the difficulty in selling a home in recent years, and the overall loss of value of many homes in the United States during the recent recession.

In "Recent Trends and Patterns" from 2011, Remodeling Magazine speculates that the cause of the drop in recouped investment is due to a depressed real estate market. Homeowners who want to make the most of their window replacement cost might be advised to wait on the market to improve before selling, which can help increase the bottom line sale price of their property, and thus increase their return on investment for any home improvement work done in previous years.