Whether They’re Selling or Staying,
Homeowners Rush to Remodel
By: Clare Trapasso
The national shortage of homes for sale is not only pushing up housing prices, it’s also pushing up the numbers for home improvement projects, according to a recent report. Both sellers hoping to get top dollar and homeowners who just can’t afford to trade up are plowing money into remodeling.
Bathroom projects continue to reign supreme: 81% of remodelers did work on this most special of rooms in 2015, according to a National Association of Home Builders survey of 274 remodelers. Kitchen overhauls were next on the list, at 79%, followed by whole house remodeling, at 49%, and room additions, at 47%.
Window and door replacements fell to 36% of the most common work in 2015, from 45% a year earlier, according to the survey.
“Homeowners are feeling good about the financial positions they’re in” after the dark days of the recession, says longtime Wichita, KS, remodeler Tim Shigley, chair of the association’s remodeling arm. So for more people, “it’s time to make an improvement on their house.”
Whole-home remodeling projects were up 10% in 2016 over 2013, according to the survey. Room additions rose by 12%, and finished basements increased 8%.
The desire for better and newer amenities—granite countertops, anyone?—drove the increase in remodeling work, according to the survey.
The need to replace and repair older fixtures and work (e.g., ugly bathroom tiling) was the second most cited reason homeowners reached out to contractors. That was followed by wanting more space; trying to avoid moving to another home; and outfitting their property so they could comfortably grow old in their existing homes.
The hammer, tiles, and paint usually come out when the economy and the housing market are strong, so homeowners feel confident, and have the cash and home equity lines of credit, for costly remodels, says Craig Webb, editor of Remodeling magazine. The work also typically goes up when home prices rise and owners want to get top dollar before listing their properties.
But before homeowners max out their credit cards, cash out their 401(k)s, or take out hefty loans, they should think twice before shelling out large sums on costly remodels if they plan to sell in the near future.
“Suppose you’ve decided you want to have a kitchen exactly like you did when you grew up, so all the appliances are avocado green,” Webb says. “Someone with more modern taste will walk in and not care that you spent tens of thousands of dollars to re-create your childhood dream.”
Therefore owners shouldn’t race to make too many costly improvements if they plan to flip the property soon, says Shigley.
“Do the remodel for yourself,” Shigley says. “Don’t be thinking of the next homeowner.”
Posted on June 22, 2016 at 3:40 pm by Sid Bullard