Is 2017 the Year You’ll Finally Remodel?

BY ERIK J. MARTIN ON APRIL 8TH, 2017

Thinking about tackling some overdue home upkeep this year? Join the club. Because, based on the latest data, you’re not alone.

Home improvement and repair spending across the country is anticipated to increase 6.7 percent and top out at $317 billion in 2017, per the Leading Indicator of Remodeling Activity (LIRA) published by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. If these estimates prove accurate, that would roughly equal the 6.9 percent growth projected by LIRA for 2016.

Experts say remodeling activity should remain robust this year for several reasons.

“First, we’re seeing full employment in the labor market, and wages have finally started rising. This is the best things have been for the average homeowner in America since the recession in 2008, and many people have invested their extra pocket money in their homes,” says Jeff Wilson, HGTV host and author of “The Greened House Effect” (2013, Chelsea Green Publishing). “Second, new home prices in select markets are already pushing bubble levels, like Portland, Oregon. Third, mortgage rates will be rising with the expected Fed rate hikes, which will discourage home buying. So people are looking to where they live and deciding to spruce things up a bit if they’re going to stick around.”

There are other good reasons to consider fixing up your digs today, says J.B. Sassano, president of Mr. Handyman, a home maintenance and remodeling provider in Ann Arbor, Mich.

“Home improvement projects can certainly improve your quality of living and help those looking to sell a home. And homes with mortgages that are underwater can benefit from remodels and repairs, too,” Sassano says.

If you’re curious which remodeling projects offer the best resale value return on investment (ROI), look to Remodeling magazine’s new 2017 Cost vs. Value report: placing loose-fill insulation in the attic tops the list (a 107.7 percent ROI), followed by steel door replacement (90.7 percent), and manufactured stone veneer (89.4 percent). Kitchen and bath renovations – among the most popular and common projects – don’t necessarily recoup costs as impressively; a midrange bathroom addition, for example, yields an ROI of only 53.8 percent.

“Energy efficiency is the one area that does promise an actual return on investment – the moment you install better windows and doors, more insulation, and air sealing, your energy bills begin to pay you back,” Wilson says.

Jody Costello, a San Diego-based home renovation planning expert, says preplanning is the key to a successful remodel.

“This means getting educated on your state’s contractors’ laws, what your rights and your contractor’s rights are, legal documents you must include in your written agreements, down payment requirements, and more,” Costello says. “Also, you have to thoroughly vet the contractor you choose by checking on license status, talking with referrals, conducting background checks, and asking detailed questions about how they plan to manage the project.”

Setting a realistic budget is crucial, as well.

“Additional costs can come from labor, materials, permits, disposal, and rental fees, and design or architectural fees,” Sassano says. “You may need to make some adjustments to your original design in order to stay within the parameters of your budget and keep in line with the value of other homes in your neighborhood. And you may be able to reduce the cost by doing some of the work yourself.”

Remodeling contractor Justin Ake from Altoona, Pa., advises do-it-yourselfers to know what they’re getting into before starting.

“Use more than one source of information to guide you. One YouTube video will not cover all the possible scenarios that may pertain to your particular project,” Ake says. “Also, be flexible in setting your timetable and financial estimates. It’s inevitable that problems may become evident once demolition starts, so plan carefully for unforeseen circumstances and prepare to deal with frustrations that may come along the way.”

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