Home Remodeling On The Cheap
INDUSTRY NEWS, SHASTA COUNTY, TIPS FOR BUYERS, TIPS FOR SENIORS
November 23rd, 2009
One side effect of the housing meltdown is plenty of out of work contractors willing to work for less just to pay the bills. A recent article in the Wall Street Journal estimates “remodeling prices are down 5% to 10% across the U.S. from their peak”. I would venture to say that number is even higher in the North state due to our very high unemployment rate. The article points out that spending on home remodeling projects from the record peak of $146 billion for third quarter 2006 to the third quarter 2007 has dropped to $118 billion for the year ending in the first quarter of 2009.
The factors cited for causing this decline include the sluggish real estate market, decreasing home prices and tighter credit. Most remodeling projects take place within 18-24 months of a home purchase. Lower number of units sold means fewer remodeling projects to follow. Lower home values mean homeowners can’t tap equity for remodeling projects. Tighter credit standards preclude borrowing for some wanting to remodel their homes.
In some areas, new home builders are venturing into the remodeling business creating additional competition for contractors that make their bread and butter focusing on the remodeling segment of the construction industry. Most remodeling project costs are 1/3 materials and 2/3 labor. Contractors are paying more for taxes and insurance but building material costs have declined for most materials not made from oil. Contractors resisting price cutting to land jobs are finding that others will knock down their bids to lock-up a remodel contract. One downside is the low bidder can’t finish the job at the agreed upon price “leading them to cut corners or even abandon the job”. The lowest price may not be the best value warn industry experts.
Another pitfall is possibly hiring someone that is an unlicensed moonlighting amateur. This can lead to shoddy work and little recourse due to the fact there is no license to file a complaint against.
My wife and I have jumped on the remodel bandwagon this year by replacing all of our plumbing and light fixtures, windows and two bathroom remodels. Next we hope to replace all our flooring and eventually a major kitchen remodel. Contractors are anxious to bid our work and are responsive to our calls unlike the boom times when you only got to speak to an answering machine and had a 50/50 chance of getting a return call.
Contractors need the work and our economy needs the cash circulation so jump in if you have the need and financial capability.
530-224-6767 or 530-941-7492
BRAD GARBUTT
REALTOR/BROKER ASSOCIATE
REAL ESTATE PROFESSIONALS REAL LIVING
CORNER OF COURT AND PLACER IN REDDING
QUARTER CENTURY LOCAL REAL ESTATE EXPERIENCE
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