It may be a lousy time to try to sell your home, but if you’ve postponed a necessary renovation, say repairing a leaky roof or updating an old bathroom, now just might be the ideal time to get started, no matter if you decide to hire out or do it yourself.
Of course there are stipulations, such as: If you’re hoping to tackle these renovations with the help of a loan, you should:
- Have at least 20% equity in your house
- Have proof of income, and
- have a good credit rating
Sure getting a home equity loan is harder these days, but it’s not impossible. Greg McBride, the senior financial analyst at Bankrate.com, argues that if the conditions are right (e.g. what I’ve listed above) banks will be happy to loan you some cash: “They need to offset all of those bad loans with quality ones.”
OK, another stipulation: Hopefully you didn’t buy at the tip of the peak in an area where prices doubled or tripled. That may make getting a loan tricky to impossible, but let’s assume that you didn’t do that, and move on to a list of reasons why this is a buyer’s market for home improvers.
Contractors are Taking on Less Expensive Projects
Many contractors now need smaller jobs to keep their crews busy and their business afloat. They are also more open to discounting their services. Some skilled trades like plumbers, electricians etc. may not have dropped prices much, but other trades such as finish carpenters, painters, and tile setters are more competitive now.
Many Supplies are Cheaper
Especially helpful for DIYers. With the dwindling demand, many construction materials have come down in price. According to Forbes, steel, aluminum and copper are dropping in price. Steel is down 9% and copper (commonly used for wiring and plumbing) is down 11% from a year ago.
Lumber has also dropped in price, though not as drastically. Lumber, sold per 1,000 board feet, sells at around $207 right now but some predict it to drop as low as $172 in the near future. And Places like Lowes and Home Depot are becoming more aggressive in their discounts. Home Depot’s Website they boldly proclaims “NOBODY BEATS OUR PRICES, If any competitor tries, we’ll beat their price by 10%. Guaranteed.”
Take Your Countertop for Granite
If you like granite, and many people do (I’m not a fan but that’s neither here nor there) now is a good time to do a little countertop remodeling. Granite’s durable and long lasting, and popular! For this reason, and because it’s so easy to manufacture, the market is pretty well saturated so prices have come down, some contractors say the price has decreased 25% over the past year.
You’re Stickin’ Around
Given the real estate market, you’re probably not planning to sell for a few years. And that means you can really kick back and enjoy the improvements you make instead of focusing on them as investments.
The Harvard Joint Center for Housing Studies has predicted that by the end of 2009 home remodeling will be down 12 % from 2008. But you can buck this trend armed with the knowledge that the Fed will most likely (oh who knows?) continue to cut home equity interest rates. So if you’re in a position to remodel and are so inclined, there are plenty of reasons to seize the day.