With housing prices remaining steady, interest rates low and contractors back in full swing, this is a prime time for home remodeling.
The remodeling market is confident, and the economy is holding. The experts in the market analysis world say 2014 is a good year for the remodeling industry.
According to the Leading Indicator of Remodeling Activity, a report by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, 2014 already has had a good start and that momentum is expected to carry on throughout the year.
The projection shows double-digit gains this year over last year for the first quarter, and gains of just under 10 percent by the third quarter are expected. The study leaders attribute the growth to homeowners’ confidence in the housing market, which results from growth in home prices, housing starts and existing home sales. With that increased confidence, homeowners are now more likely to undertake home improvements they deferred during the Great Recession.
Housing experts project a slight slowing of the market by midyear because borrowing costs will start to creep back up. Right now, however, interest rates are still low and banks are loosening up funds. If you want to remodel, now is the time.
The National Association of Home Builders also reports increases from last year and predicts a good year for 2014. The Remodeling Market Index shows the highest reading since the first quarter of 2004 in remodelers’ activity and confidence in the market.
The experts at Remodeling Magazine agree and have another report to prove it. Every year, the magazine puts out its "Cost vs. Value" report assessing remodeling projects and determining the return on investment. For 2014, all 35 projects on the list added more value this year than last year, and this is the second consecutive year of increases after years of decline. This is another sign the housing and remodeling markets are on the mend. It feels good to see some good news about the remodeling industry!
We love reading the "Cost vs. Value" report and seeing which projects make the top of the list. For 2014, the top-ranking home improvement across the nation was a new front door, which according to the report adds 96.6 percent of the amount you spent to the value of your home. The other projects yielding the highest returns, according to the report, were a wood deck addition, adding an attic bedroom, garage door replacement and a minor kitchen remodel. You can see that homeowners are still cautious, as these projects still have a somewhat limited scope.
In our office, we have felt the market shift to a more positive side as well. People are more excited and ready to remodel when they come through our door. A common story is that they have been putting off some remodeling projects because of the economy but now they are now ready to move forward. Currently, the most common requests are for more gathering space, lovely master suites and bigger garages.
It is common for people to think they need to add on to their homes. However, it is not unusual to find that their problems can be addressed by reconfiguring existing space within the building footprint. This type of redesign is less expensive than an addition and can often accomplish the same goals.
If you're thinking about a redesign or a remodel, here are a few things to consider when planning. Assembling your design team prior to construction is advisable. The more you plan up front, the better your project will be and the easier it will be to create and stick to an accurate budget. The plan comes first. Even before you can secure a loan with those low interest rates, you need to have the plans and an accurate budget.
If you feel the new energy of the remodeling market rubbing off on you, 2014 may be your year to remodel.
Ann Robinson and Annie V. Schwemmer are the principal architects and co-founders of a residential architectural firm focused on life-changing remodeling designs at RenovationDesignGroup.com. Send comments or questions to ask@RenovationDesignGroup.com