Remodeling is suffering a double dip in sales, not unlike the double dip in home prices, but just as it's a good time to buy an affordable home, it's a good time to budget for and negotiate a home improvement deal.
RemodelOrMove.com says the number of homeowners reporting that the economy is dashing their hopes to remodel jumped from 69 percent earlier this year in the spring to nearly 80 percent this fall.
"The Fall 2011 U.S. Remodeling Sentiment Report shows that after a year of stabilization in 2010, the unrelenting bad news about the economy this summer is driving many homeowners to reconsider and either delay or scale back their remodeling plans," says Dan Fritschen, RemodelOrMove.com founder and publisher.
Sentiment in the report indicates that in the next few quarters there will be a contraction in spending on residential remodeling -- a double-dip. By summer 2012, barring any additional significant negative news about the economy, spending will pick up again.
That's the silver lining.
For homeowners sitting on the remodeling fence, the findings mean it's a good time to at least go comparison shopping for a contractor, architect and materials and try to lock costs as much as possible now, before a potential 2012 rush.
The other option is to bite the bullet now, save money by actually getting the work done at bargain-basement prices and have an upgraded home poised to benefit from the remodeling job's added home value. If selling is in the near future, the job could also have a possible impact on the sale price.
"Reaching the spending levels of the peak in 2005 to 2007 will not be possible until a sustained and widespread economic recovery is achieved with unemployment below 8 percent, interest rates for 30 year mortgages below 6 percent, home prices increasing more than 10 percent above current levels, and lending easing to enable qualified homeowners to easily access their home equity," according to the report.
That's a tall order. Homeowners' confidence is pretty rattled.
• Home equity that drove the remodeling frenzy in 2005 and 2006 has fallen 40 percent since
, forcing homeowners to reduce the scope of their remodel by 20 percent since the peak.
• The number of respondents who report that they plan to use "economy" materials in their remodel rose to 77 percent in the most recent report, up from 68 percent at the beginning of 2011.
• The number of homeowners who plan to go the do-it-yourself route is on the rise, obviously, to save money, while plans to hire an architect are on the decline, for the same reason.
• Most homeowners in this survey, 51 percent, say they are excited about remodeling, but 11 percent are dreading the process, costs, inconveniences, and mess.
• Nineteen percent of homeowners report their goal is to remodel to create their dream home, while 58 percent hope to remodel with the goal of adding a few special features to their homes.
Homeowners are making some smart moves to contend with economic realities.
Remodels considered more cosmetic- and style-related, such as remodeled bathrooms and kitchens are less popular. Instead the trend is toward adding a bathroom or bedroom that brings the home's amenities up to or above the neighborhood average.
"This makes sense, for many homeowners. Updating an existing room can be put off because it is often seen as a luxury, while the addition of a bathroom is a necessity due to changes in the needs of the family," the report explains.
The RemodelOrMove report generates data by sampling of 5,000 homeowners via an online survey containing about 70 questions about homeowners' satisfaction with their current home and their plans if they remodel their existing home or if they move to a new one. All respondents are considering change -- either moving or improving.
Broderick Perkins Realty Times October 6, 2011