The housing market may have slowed some, but the remodeling market is alive and well.
The National Association of Home Builders estimated that consumers plan to spend more on remodeling their homes this year — a whopping $233 billion, as opposed to $228 billion just last year.
The new Leading Indicator for Remodeling Activity, developed by Harvard, shows that home improvement spending by homeowners in 2007 is projected to increase by 3.6%. That's down from 11% last year, but homeowner spending on remodeling projects is expected to grow 44% by 2015.
And in Texas, homeowner remodeling expenditures aren't expected to decrease much at all.
"So far, the biggest blow to the Texas residential sales market has been isolated to the new-home market, particularly houses valued at less than $200,000," says Mark Dotzour, Ph.D., chief economist with the Real Estate Center at Texas A&M University. "To the extent that the housing sales weakness stays focused in the new-home market, I would expect Texas remodeling to continue to have strength."
Also, if you consider that much of today's housing stock was built in the 1950s, 1960s, and 1970s — during huge housing booms — many of those homes are in need of updating. After all, avocado green and harvest gold are oh so seventies.
In any case, whether you're planning an addition or simply painting a bathroom, most improvements you make to your home are worth doing — and will likely pay off if and when you decide to sell, and will have a big influence when you decide
"Home improvements quite often are made by owners who are about to sell their home or by those who have recently bought homes," says Gopal Ahluwalia, staff vice president of research for the National Association of Home Builders.
Why remodel? Because we can.
Home values across the country, including in Texas, have risen in many cases, meaning that it's much easier for consumers to take advantage of often considerable equity to pay for expensive improvements — improvements they might not have been able to do otherwise.
Also, home improvement loans are still relatively easy to come by, with interest rates remaining low enough to make getting a loan well worth it. And, those who are preparing to sell are also realizing the value of painting a room, adding extra insulation, or even sprucing up the kitchen.
In fact, many homeowners will consult with their REALTOR® before making any decisions to find out which amenities are most popular with buyers, so their home will be more appealing in the event they ever decide to sell.
Kitchens and bathrooms remain at the top of most homebuyers and homeowners lists when it comes to remodeling — and for good reason. According to the National Association of REALTORS® (NAR) 2006 Cost vs. Value Report, those are the top projects when it comes to return on investment — with kitchens coming in at 80.6% and bathroom remodels at 84.9%.
Also tops on the list are adding rooms, especially master suites (72.6%) and family rooms (71.5%); adding decks (76.8%); and replacing a roof (73.9%). Thinking green is another smart move — both for the planet and for your home's overall value. Energy-efficient appliances, sustainable flooring like bamboo and Marmoleum (an eco-friendly linoleum that comes in fabulous bright colors), solar screens, and more are in demand.
Beyond the outdoor room, homeowners are also adding screened-in porches to enjoy the outside without the bugs. These spaces are transitional and can be used anytime — whether you're grilling or not — and that adds value to your home.