For many years, the lower level (basement) finish has not enjoyed a high return in St Louis. Perhaps due to people not using it as much, or average age of the finish was 20+ years, or owners did much of it themselves (lower quality workmanship plus lower upfront cost). That has changed.

I have noticed in my calculations for sellers and buyers the last 12 months that lower level finish is realizing a higher valuation. I believe this is mainly due to 3 reasons:

(1) Zillow began using the square footage field from our MLS that includes the lower finish in the last 18 months in lieu of our "main" field, which does not include the basement. Suddenly, most homes appear substantially larger and sport a lower price per foot. On homes without a finished lower, of course, that number would stay the same. As buyers shop Zillow, and some other realty sites that have adopted this change, the homes with finished space in the basement now compare more favorably, especially if the entire space is finished.

(2) The pandemic last year created an immediate need for families to have multiple, separated areas for virtual classes and meetings. Many times, this meant going downstairs. If there was no finish, a desire to finish it, or moving to a home that did, was the effect. That led to more buyers targeting homes with the extra finish, and bidding those homes up higher in price. With the pandemic waning, I do not believe this will change, as people love having the extra space, particularly if newer finish.

(3) The workmanship has turned more professional the last few years, and a higher material quality is being used. When I began selling 31 years ago, it was common for basements to be finished by the homeowner and some buddies in part or in full. Drywall was always the giveaway if the joints were obvious. More so on less expensive homes, they rarely matched the quality of the main or upper levels. In fact, 10-15 years ago, when our Realtor Association was struggling with how to count the basement finish (there was only one field for size), one of the factors of including the lower level was that the quality had to be on par with the other levels. If markedly inferior, whether poor workmanship or too old among other factors, it was not to be counted in the square foot field.

Today, however, homeowners typically spend as much on basement projects, if not more. In fact, I have shown many homes recently where the lower level was the crown jewel. Fewer people are concerned about maintaining access to pipes via drop ceilings, so they are drywalling the ceiling with can lighting, just like other levels, which also raises the ceiling height. And fewer homes have chronic basement leaks, as sump pumps with drain tile systems are now common. With less concern about resulting damage, owners feel better about investing more money and spending more time down there.

My figures are not exact, as they are based on individual home pricing analyses. But where I would have added $15,000 in the past for average basement finish (750 sq ft at 10-20 yrs old, no bath) vs unfinished on a typical size home, I am now adding $18,000 to 20,000. If the finished area is small and very dated, I would add very little value. If the home was larger and higher priced, it could be a $30,000 or 40,000 difference. You still do not get a return close to the retail cost of finishing. I have told people to expect around 50% return in the past depending on various factors. Today that may be 50-65% if it is professionally done and the layout makes sense.

Happy finishing!