As the housing market continues to limp along, and as people downsize home improvement plans to simple tinkering, it's wise to think in terms of not letting things go to pot around the property.
Even when home construction began to dive five years ago, home remodeling kept going - and even briefly picked up steam as homeowners decided to sit tight and renovate rather than sell. Today, it's more like circling the covered wagons against the arrows of outrageous misfortune. Los Angeles Times writer Mary Umberger recently wrote that "practical, dollar-conscious" repairs and improvements have taken the place of grandiose upgrades and remodeling projects.
Who makes the renovations and repairs?
The Joint Center for Housing Studies at Harvard University reported last spring that a huge turnover of homes by aging Baby Boomers means there will be more repair work and home improvement projects for younger homeowners. There were 24.5 million owner-occupant sellers between 1997 and 2007, and nearly a third of them were over age 55.
Researchers found that while owners made small improvements to make a sale attractive, the buyers ended up assuming larger improvements, especially if they had young families. Imagine taking on a bathroom project at a home where a married couple had lived for 20 or 25 years and altering it to accommodate a busy family. You know the older couple won't perform the bath improvement effort ahead of the sale!
When will we spend again?
For the last 20 years, repairs, restorations and home improvements made up 45 percent of residential investments as home prices escalated at a runaway pace. Yet, in 2009, even with the collapse in home sales, the remodeling market did $290 billion in business, nearly doubling the size of expenditures before 1990.
Another Harvard Study, "A New Decade of Growth for Remodeling," discovered that during the stagnant recession, the more attractive home improvement projects are ones that pay out dividends over time. For example, Harvard researchers found, "energy-efficient retrofits" are extremely popular right now.
Researchers found that insulation projects, minor bath remodels or deck and porch additions lead the way today in projects that homeowners undertake by themselves. We still see value in the more expensive and complicated projects - heating and air conditioning, roofing or siding - but turn those over to experienced contractors. The study says, "Between mid-2009 and mid-2010, the share of home improvement contractors reporting that they worked on projects eligible for federal energy tax credits jumped from less than 40 percent to almost 60 percent."
Now that those tax credit incentives are gone, one wonders when we'll return to upgrading our homes. Obviously, we may be forced to live in them longer.