During these wild economic times—with inflation and higher interest rates—a lot of home owners are wondering if it’s a good time to remodel their homes. Your first inclination might be to put those plans on hold, but you might want to reconsider.
As we all know, when home renovations are done right and in the right area of the home, it can substantially raise the value of the property. But if you do decide to go ahead with a remodel during these uncertain times, there are some important things to consider that will help you decide if now is the best time for the endeavour.
During this financial climate, you should consider the following before deciding on any renovation project:
- the materials and supplies needed
- the availability of renovation professionals
- how long you intend on living in your home
Is Everyone Else Doing Renos or Holding Back?
You may remember during the height of the Covid pandemic—building supplies were in short supply and prices skyrocketed. That happened because everyone hunkered down at home and used the time to make upgrades to their property. Now even though Covid is still here, the spike in the demand for home renovations has started to die down.
According to the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, the demand for home building and renovations is expected to slow down dramatically in mid 2023. So what does that mean for homeowners like you?
Materials and Skilled Professionals May Be Easier to Find
It’s the rule of supply and demand: if there isn’t a high demand for tradespeople and certain materials, they’ll be easier to find and at a more reasonable price.
We’ve all heard the horror stories—people struggling to find lumber to repair their deck and fence, or the difficulty in finding a great contractor who’s available to work on a bathroom reno. So if the prediction that 2023 will have a slowdown in home remodelling, it could be a great time to get some projects done around the house because the demand and costs will have decreased.
BusinessInsider.com reports that lumber prices are already down to $604.50 per 1000 board feet as of July of 2022—falling 47% year-to-date, and 65% off from the 2021 high of $1,733 per thousand board feet. Inventories are starting to pile up at both sawmills and home improvement stores, making contractors more affordable and more available. As the cost to build declines, inflationary pressures on the housing market will subside too.
What Should You Focus On?
While it may be tempting to remodel your home and then quickly sell it, you might consider staying in your home for at least five years so you can comfortably weather any housing market volatility and price fluctuations. So if you’re planning on living in your house for a while this might be a great time to get those dream renovations done.
Some projects you might want to consider remodelling in your home are:
- The kitchens & bathrooms: These are always great places to start as they have a great return on investment, and impress future buyers.
- The laundry room: These days, more and more people want a finished, clean and bright laundry room with storage and nice finishes.
- Outdoor living spaces: A properly renovated outdoor space can make your home feel and look much larger.
- The basement: the basement is one of the best places to renovate to add more square footage to your living spaces.
You Can Start With Minor Renos at First
If big construction projects leave you feeling a bit anxious or apprehensive because of the economy, simply start small. There are plenty of minor renovation projects that you’ll enjoy and will pay off when it’s time to sell. These include:
- Lighting upgrades: Exterior landscape lighting can make your home’s curb appeal skyrocket. Updating old builder-grade ceiling light fixtures are also a quick and cost-effective way to transform the look of any room in the home.
- Consider a ceiling Fan: As heating and cooling expenses are continually increasing, a ceiling fan could be a great alternative way of making your home feel comfortable while reducing heating and air conditioning expenses.
- A new front door: Replacing your front door is a perfect simple project that will have a huge impact on the look and feel of your home.
- Add new flooring: You don’t need to install new flooring in every room of your home but you can choose one or two small rooms to start with. These small changes will create a big impact and as your budget changes, you can consider the benefits of installing new flooring elsewhere.
- Install new shelving: At extremely affordable costs, you can install new high-end cabinetry in your kitchen or bathroom and take the look of these rooms to a whole new level. This is the type of project that won’t cost too much and you won’t need a contractor to help you.
You can also think about adding shelves or closet organizers; a pantry or a new linen closet; new bathroom or kitchen cupboards—there are a lot of simply upgrades that can have a great impact on updating your space. Here are some tips on what makes a home sell faster than others which and how to get a faster and easier sale.
Pro Tip: Always Start with a Pen and Paper
One of the best tips we can give you is to grab a pen and some paper and start creating your list. Start by listing anything you notice that you’ve been wanting to improve for a while. Even in this economy, the sky’s the limit!
The following are good tips on how to get your list of potential renovation jobs started:
- Prioritize things that are urgent, and things that would just be nice to finally get done (e.g roofing, leaky pipes, loose windows, creaky doors, new countertops, shower or bathtub upgrades).
- After creating your list, consider the budget you’re willing and able to spend to get these items done.
- Ask friends and family which tradespeople they would recommend to tackle these projects if needed, and if they don’t know any, start doing research.
- If you need contractors for any of the projects, obtain several quotes, ask for references and find out when they can start the project.
You can read our blog on the top Home Renovations With The Worst Return on Investment for information on renos you should avoid.
We’re always available to give you a quick update on what’s happening in your neighbourhood’s real estate market. We would also love to chat about what trends and features in a home will make the most sense in the long run. Feel free to give me a call to talk about your goals and what you’ve got planned for your home!