Why You Should Renovate Your Home Now

Why You Should Renovate Your Home Now

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Rising material costs, inflation weigh in.

Most homeowners don’t like to rush into new projects, perhaps realizing that without careful planning, they’ll pay more for a project then necessary or complete a renovation they really weren’t interested in doing in the first place.

These are valid reasons why you should be cautious and only after careful planning move forward. Might I suggest something that isn’t so obvious? And that would be this: you should renovate your home as soon as possible and for the following very good reasons:

Contractor availability — The ongoing housing slump means that contractors are working a lot less than they were a few years ago, some are working with much smaller staffs too. Besides not having as many workers, they don’t have as many jobs to do. Those jobs they get are because they’re bidding lower for the work. While the market is down, you can expect to save a bundle on that renovation project you’ve always wanted to have done. Wait a few years to do the work and prices will rise, perhaps at sharp rate if contractors have more business than they can handle.

Pricier components — Have you seen the price of silver lately? How about wood? Granite? Plastic? Higher fuel prices means that shipping costs are on the way up; we haven’t even seen the end to that rise. Wait a few years and prices are likely to jump at an even faster rate. Another contributor to increased prices are emerging markets which are demanding oil, wood, drywall, fixtures, carpeting and other items found in American homes. If demand outstrips supply, then you’ll pay more for these items. In 2008, Service Magic tracked the cost of renovations done in 2003 and 2008, noting a sharp upward trend as the cost of some materials, such as wood for decks, has risen.1

Interest rates — Inflation has been held at bay for several years, much longer than what some people had expected. That’s good news for consumers, but once the economy does recover, expect the federal government to allow interest rates to move up. Plus, we owe trillions of dollars in debt; you’ll be helping to pay that down by paying higher interest rates on loans. Enjoy a 5 or 6 percent loan now — we may see 9, even 10 percent in a few years.

Neighborhood considerations — Sooner or later, those homes languishing for sale in your neighborhood will sell. Other homes will be updated, as your neighbors consider their own needs and respond accordingly. That means your home could fall behind the neighborhood average and be worth less. Repairs and maintenance are part of homeownership too — you can combine your projects with your renovation and save yourself some money. Writing for CNN/Money, Gerri Willis advises homeowners to keep up with the changes their neighbors make as one way to preserve a home’s value.2

Keep in mind that in some neighborhoods declining home values can skewer your plans. Know your local market and if home prices have stabilized or are rising, then you can move forward with your plans.

References

1 Service Magic; Recession Only a Hiccup for the Rising Cost of Home Remodels; Marcus Pickett; 2008

2 CNN Money; Home Renovation Checklist; Gerri Willis; March 6, 2006

 

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Categories: Home Renovation

About Author

Matthew C. Keegan

Matt Keegan is a freelance writer and editor as well as publisher of "Auto Trends Magazine", an online publication. Matt covers campus, consumer, business and financial topics on various websites and weblogs, and has been published in the "Houston Chronicle", "Sam's Club Magazine" and "Wisconsin Golfer".