M.P. McQueen of the Wall Street Journal (WSJ) weighed in this week on the do-it-yourself boom. It seems as the housing market continues to circle the drain, the home improvement industry is about to profit from the first spending increase in four years.
Driven by plunging prices, cash shortages, and ongoing house payments, homeowners are strategizing for—and completing—renovation, addition, or improvement projects. Remodeling spending is up 5 percent this year.
Some renovations beautify and preserve the homes that people now realize will be theirs for the near future. The WSJ reports that 13 million recent borrowers are above water on their mortgages. One San Francisco bay area executive chose to complete a kitchen remodeling project on a $750,000 tract home, rather than to start an addition that involved ripping into walls.
In Maryland, one couple spent around $30,000 to update a World War II home when it became an empty nest. They preferred to sell and move, but flooding forced their hand into making long-term, affordable improvements in the upstairs bath and kitchen with hopes of recouping some of their investment on the back end.
Projects with Realistic Budgets
Keeping your expectations in check may be your key to success. A Home Depot executive said interior tile, paint, bath, and faucet materials are among the best sellers. And expansions are rare. Contractors report that most of their kitchen remodeling jobs are completed to the dimensions of the pre-existing kitchen.
Welcome Homeowner says you should always “let reality govern spending.” Can you afford $30,000 to $40,000 while waiting for the market to start growing again? You still have to make conservative estimates about how much of the project you can do without professional help. If you’re interested in sustainability, which projects—bath, kitchen, flooring, additions—can you complete with green materials without compromising your budget?
The basic idea behind the surge in home improvements, the WSJ adds, is that you make high-end, glitzy improvements or restorations during the bubble. But now, when it’s no longer a house you want to flip, you want to make it your home.
Looking for a project? View my post on Snappy Makeovers for The New Year or the one about the Return on Investment for Home Improvements. Those should get you thinking.
I don’t think many people are looking to turn their houses around in value and sell them like they used to in a good market. They are, like you said, trying to make them into their homes for a long time to come if those who are lucky enough have enough money to do renovations. I think it will only get better from here; hopefully we can alleviate any future bubbles though.
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