Cost and Competition: Remodeling Heats Up
If you are thinking that this is the year to tackle a bigger renovation project that you’ve been postponing, you’re not the only one. After several years of maintenance mode, homeowners are going to spend on actual improvements this year, predicts the Joint Center for Housing Studies at Harvard.
Leading the charge: baby boomers (of course) renovating their homes to accommodate changing needs as they age. Boomers are expected to account for over 45% of remodeling spending this year. Meanwhile, growing families with little equity are expected to expand rather than move, and three million foreclosed properties need some TLC before they can be rented or resold.
Demand is already driving up costs for materials by about 35%, according to a recent survey by the Associated General Contractors of America. Drywall, wood, and paint in particular are going to cost more. Last year, only 15% of contractors raised their rates. This year, twice as many will do so.
You can get ahead of these trends with some smart remodel planning:
• If your schedule is flexible, plan your project for fall, when the traditional home improvement season is winding down. Contractors are more likely to give you a price break when they know they won’t be busy.
• Ask contractors for breakouts for particular materials costs so you can negotiate for the best deal for both labor and materials.
• Consider sourcing materials on your own, shopping sales, and stockpiling your inventory in your garage.
• Closely examine the requirements of your project so you can extract maximum functionality for minimum cost. Consider, for example, using standard-sized windows instead of custom-built.
For more on remodeling costs, consider: