People will still remodel their homes in the coming years. But the odds are that theyâ€™ll be more practical about it.
At least thatâ€™s what Abbe Will, withÂ Harvard Universityâ€™s Joint Center for Housing Studies, recently toldÂ Chicago Tribune real estate columnistÂ Mary Umberger.
According to Willeâ€™s research, those dramatic housing renovations â€“ the ones many homeowners took on during the heights of the housing boom â€“ are becoming less common. Instead, homeowners are taking on smaller-scale renovation projects that donâ€™t cost a small fortune.
Hereâ€™s an example: Instead of gut-renovating their kitchens and installing top-of-the-line refrigerators, ovens and countertops, homeowners are more likely to refinish their existing cabinets and paint their kitchenâ€™s walls. If theyâ€™re splurging, they may buy some new faucets for their kitchen sinks.
There are two main reasons for this: First, the economic downturn means that homeowners have fewer dollars to spend.
Secondly, the housing marketâ€™s correction has sent the prices of condominiums and single-family homes falling, even in strong real estate markets like the one we enjoy in Chicago. This means that home sellers canâ€™t expect to increase their asking prices by tens of thousands of dollars just because they paid for a costly master bedroom remodel.
The big-ticket remodeling projects â€“ even those that create sparkling new kitchens, bathrooms and master suites â€“ are no longer bringing in the big bucks at resale time. Itâ€™s true that these renovations will still increase a homeâ€™s value. And they may lessen the amount of time it takes to sell a condo or single-family home. But itâ€™s more difficult than ever for sellers to nab a big enough price increase to justify spending the big dollars on a top-of-the-line renovation.
Now, those homeowners who want to splurge on a kitchen or bath remodel because they plan on living in their homes for 10 years or more and want to enjoy their time there as much as possible? Thatâ€™s a different matter. Homeowners renovating for their own enjoyment, and who arenâ€™t thinking about resale value, can do what they want with their money.
All others? Itâ€™s best to think a bit smaller when itâ€™s time to tackle a renovation project.