More Homeowners Tackle Renovation Projects

Homeowners are sprucing up their properties and undertaking more remodeling and repair projects, according to a recent study.

The Leading Indicator of Remodeling Activity, released by the Joint Center for Housing Studies at Harvard University, shows an annual growth in home improvement and repair expenditure this year that will remain above its long-term trend of 5 percent. Index authors, however, foresee a steady decline from 7.3 percent in the first quarter to 6.1 percent by the first quarter of 2018.

The National Association of Home Builders’ Remodeling Market Index also showed an increase in the first quarter of 2017, marking the highest reading in activity since 2015. The NAHB’s index shows that more remodelers are reporting that activity is higher now compared to the prior quarter. “A milder than usual winter has led to increased remodeling activity and a positive outlook for spring,” says Dan Bawden, the chairman of NAHB Remodelers. “Remodelers are seeing stronger market conditions with customers more willing to spend money on both small and large projects.”

—Melissa Dittmann Tracey, REALTOR® Magazine

Kitchen Makeover Ideas for Under $1,000

Kitchen remodels can cost your clients upwards to $20,000 or more. But there are a few simple and inexpensive tweaks that can give a dated kitchen a more modern edge. Here are some ideas:

  • Hardware: Replacing current hardware can really modernize the kitchen, but make sure it compliments the kitchen’s existing décor. Hardware can make a big difference in the look of a kitchen.
  • Faucet: Make a new faucet the focal point in the kitchen that can offer an eye-catching makeover.
  • Backsplash: A backsplash can be an instant way to dress up a kitchen. A stainless steel laminate backsplash can work with most kitchen styles and is known as being a more affordable option.
  • Paint: Repaint or refinish old cabinets for a dramatic update. White kitchen cabinets are among the most popular trends right now, according to the National Kitchen & Bath Association’s trend reports.
  • Lighting: Swap out the lighting for more updated models, such as pendant lights over a kitchen island or add under-cabinet lighting to highlight the countertops.

Source: “Redoing Your Kitchen on a Budget of $1,000 or Less,” RISMedia (May 18, 2016)

Home Remodeling Activity Looking to Gain Steam

Expenditures for home improvements should see healthy gains in 2016, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects annual spending growth for home improvements will accelerate from 4.3% in the first quarter of 2016 to 7.6% in the third quarter. By then, the level of annual spending in nominal terms is anticipated to surpass the previous peak set in 2006.

2016 is looking to be a stronger year for home renovation activity compared to 2015 thanks to the continued recovery in the owner-occupied housing market. In most markets across the country, rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home improvement activity.

For more information about the LIRA, including how it is calculated, please visit the Joint Center for Housing Studies website.

Home Renovation Blunders That Can Hamper Value

Renovations are mostly done not only for a home owner’s comfort but to add value to their home. However, in some cases, home owners may end up making their home worth less depending on what they choose to do.

MarketWatch recently featured some of the most common renovations for home owners that potentially could decrease the value of their home:

Eliminating a bedroom: Even if the home owner plans to remove a bedroom in order to expand another one or make a living space larger, this renovation project could burn them at resale. The more bedrooms a home has, the higher the price it usually can get.

Renovating the garage into living space: Getting rid of the garage space in favor of an extra office, family room, or bedroom can be a turnoff to many potential buyers at resale. For home owners who do choose to renovate the garage into living space, they may find leaving the garage doors on the outside a good move so that buyers could more easily convert the space back into a garage if preferable.

Removing closets: This renovation may made the home much more difficult to sell. We find people need closets and may count the number of closets per room.

See what remodeling projects offer the biggest paybacks at resale with Remodeling Magazine’s Cost vs. Value Report.

Source: “4 Renovations That Could Decrease Your Home’s Value,” MarketWatch (Nov. 16, 2015)

Owners Using Equity Loans to Spruce Up Their Home

As home prices inch up, more home owners are tapping into their equity. One in four home owners have a home equity line or loan, and more than half – 55 percent – opened it for a specific purpose and haven’t use it since, finds the 2015 BMO Harris Bank Homebuyers Report.

What are they using it for? Forty-seven percent of home owners say they use their home equity account for home improvements, followed by 22 percent who use it to consolidate debt and 20 percent who use it to make a major purchase, such as buying a car.

According to the survey, home owners say they turn to home equity lines of credit over other types of financing because the potential to use the interest paid as a tax deduction; it provides a better interest rate than other options; and the ease of accessing the funds and the ability to get the right amount needed.

Source: “Home Improvements Are the Most Popular Use of a Home Equity Account,” RISMedia (May 16, 2015)

Owners Upbeat About Their Home Values

Home sales may be off to a sluggish start this year, but home owners are still upbeat when it comes to the value of their homes. They’re willing to spend to preserve value.

Home-improving giants Lowe’s Co. and Home Depot Inc. reported “blowout fourth quarter profits,” which beat expectations with sales advancing more than 7 percent at both retailers, Bloomberg News reports. Purchases greater than $500 surged 13 percent at Lowe’s. January is showing strong gains too, heading into the spring selling season.

“Consumers are feeling better about their jobs, their wages, and certainly feeling better about the value of their home,” Lowe’s Chief Executive Officer Robert Niblock told Bloomberg. “They are re-engaging in projects that they have put off.”

The remodeling industry also confirms the gains. Remodeling companies see increases in major projects and committed work for the next three months are at all-time highs, according to a fourth quarter survey by the National Association of Home Builders.

Source: “Americans Are Still Housing Bulls, Just Ask Home Depot or Lowe’s,” Bloomberg News (Feb. 25, 2015)

Need Remodeling Tips? Consult Your Smartphone

More home owners are turning to technology to help them plan and complete their home remodeling projects, according to a study by Planese Inc., a cloud-based application provider in home improvement.

Home owners are increasingly turning to their smartphones for information and inspiration, the study finds. Twenty-seven percent of home owners surveyed say they’ve used their smartphones to help with the remodeling of their homes. What’s more, 40 percent say they plan to use their smartphones to help guide them in future projects.

“This dramatic increase in smartphone use to help with remodeling is driven by a variety of changes: greater use of mobile devices, a need of home owners to get better results from their remodeling investments, and better apps,” says Dan Fritschen, founder of www.remodelormove.com. “Mobile devices are a great compliment to the PC. Smartphones enable regular and frequent communications that are critical to improving collaboration between home owners and contractors.”

Some of the top things that home owners report using their smartphone or computer to find are remodeling design ideas, cost estimates, names of remodeling contractors, and to conduct research on products and services.

Source: Planese

Home Owners plan “Remodeling Projects”

Waiting a few years to sell? Make a few changes for your desires?  Many home owners are opting to tackle improvement projects around the house, according to a new survey of 1,500 adults by American Express Spending and Saving Tracker.

Seventy percent of home owners surveyed say they intend to take on a home improvement project this year, and they plan to spend about $3,500 on sprucing up their home, according to the survey. That’s an increase of about $100 compared to last year.

The projects will primarily concentrate on the indoors, according to the survey. More than one-third of those polled say they are devoting some of that budget to home accessories, such as throw pillows, or on appliances and new furniture.

The top home project they have lined up? Painting, which 37 percent of those surveyed say they plan to do this year. Twenty-four percent said they will do landscaping projects. These could be improvements or upgrades to increase value for a future sale?

Also, more home owners this year compared to last year say they’re going the do-it-yourself route, with plans to refurbish their houses themselves rather than hiring a professional to do it. In the survey, 43 percent of owners say they’ve been inspired to tackle home projects themselves by watching design shows on television, followed by seeing in-store displays or from viewing online design and do-it-yourself Web sites.

Source: “Home Decision 2012: Improving or Moving?” American Express (3/12)