Expect to Pay More When Remodeling Your house – The Financial Mag

The direct result of an expensive and unforgiving housing market is that more people are choosing to stay put in the houses they are residing in, and enlarging and upgrading their property instead. But remodeling is getting increasingly expensive. About 58% of house owners polled by Houzz – a remodeling website – have upgraded their houses in the past year with an average spending of $15,000. This amount spent by homeowners has not changed over the past 3 years, but the cost of renovation definitely has, all thanks to rising cost of materials and hiring labor.

The majority of remodelers on the website say that when contractions on projects tarts, there is usually a delay from the projected due dates and timelines, pushing back the date of completion. This invariably pushes up the cost of labor and we end up with higher prices.

Remodeling expenditure on the rise

The bigger a project gets, the more people are willing to part with their money in terms of remodeling, especially on those home projects which they believe would add value to their property and increase it’s resale value. For remodeling their kitchen alone, homeowners spent $30,000 on an average in 2016, while the amount was $33,000 just a year later in 2017

As the costs rise, more and more people are beginning to set strict budgets and cut-offs for their respective projects. More than 75% of the respondents started off with an initial budget in 2017, which is larger when compared to the 69% who created a budget in 2015. Still about 19% of the homeowners managed to spend above the budget, while in 2015, the number was 16%.

The kitchen and bathroom continues to consist of the most demanded upgrades, the bedrooms and attached bathroom suites were the second-most of the popular rooms to remodel and lastly, there was the living room (or family room). The average expenditure on remodeling the master bedroom increased by 30% – from $ 1,500 in 2016 to 2,000 in 2017. Spending on living rooms remained surprisingly unchanged at $3,000.

Resale value is what matters

The resale value of their house is what is most important to a majority of the homeowners, regardless of them being new or long-term owners, that’s probably why people go all out, ensuring that their master bedroom suite looks good. It’s like getting a better bang for the buck when the prospective homebuyer stumbles upon the bedroom suite and it impresses them, as that’s what they are looking for. They want the double sinks, marble bathrooms tops and bath even if they don’t take baths and do with showers.

Not just the insides of the house, the exteriors are also getting their due upgrades, with more owners preferring to opt and choose for preventive upgrades (weather element proofing, etc.), rather that those which are discretionary in nature or aesthetically pleasing to look at. These include re-enforced roofing, exterior doors, sliding windows and doors, among other trendy home designs.

Setting new trends

The new home owning species is speculated to be the one, which usually demands remodeling, as they get to upgrade and personalize their personal spaces for, probably the first time.  But the current homeowners are catching up and seem to be leading the change, as evidenced by the Houzz’s survey. About 57% of the remodelers had lived in their current homes for six years and more. On the other hand, 13% of the respondents had purchased their home in 2017.

There was also a huge jump with regards to home security and home automation system upgrades. Plenty of smart-technology installations, like thermostats, lights and electronics, increased by 18% over the past two years.  The biggest buyers, were actually the long-term house owners who seem to be hot behind the heels of the recent, more tech savvy buyers.

Speaking of the new buyers, they seem to have brought in another home-improvment trend with them; the use of credit cards. Although cash remains the predominant mode of payment to the contractors, a new trend has surfaced where financial transactions are via the plastic cards. This trend of using credit cards is mostly fostered by the younger generation, as they are 50% more likely to depend on their credit card to pay for home renovations. They are said to simply not have the home equity and financing at their disposal when making purchases and payments.

The annual growth in homeowner’s remodeling expenditure is expected to remain over 7% throughout the current year right into the first quarter of 2019.

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