The U.S. Census Bureau reported in May that roughly 75 million Americans own the homes they live in, which, at just under 65 percent, is the lowest proportion in almost 20 years. Those numbers should improve as we move into 2015, however, since sales of previously-owned homes hit a one-year peak in September.
Why are more people buying houses? Michelle Jamrisko of Bloomberg.com reports that this surge is the result of an improving economy, new job creation and a drop in mortgage rates – all good news.
When do people consider remodeling?
Are you a homeowner considering a remodeling project? If so, you may want to expedite your plans. The increased purchase of previously-owned houses should also have an effect on the home remodeling industry.
Three major factors drive remodeling decisions:
1. Single family home sales.
It’s a pretty simple equation: the more people buy homes, the more people will want to improve or personalize their living spaces. A study from the National Association of Home Builders shows that the average homebuyer stays in their home for 13 years, so it stands to reason that she or he will want to be comfortable.
2. Government energy tax credits.
State and federal governments have several programs that offer homeowners an opportunity to write off certain home improvements on their income tax bills. These rebates can change year-to-year.
For example, 2014 has been called “the year of solar” because several U.S. states are offering tax credits to homeowners who install solar power systems. Likewise, the federal government offers a standing 30 percent renewable energy tax credit for “qualified expenditures for a (solar power) system that serves a dwelling unit that is located in the United States that is owned and used as a residence by the taxpayer.
3. Aging housing stock.
“The American housing stock continues to age,” Josh Miller of Eye on Housing writes. “(This) trend represents an opportunity for remodelers, and over the long term, may signal a future increased demand for new home construction.”
Bottom line: older houses need more work, and a 2011 study by the U.S. Department of Housing and Urban Development determined that 41 percent of owner-occupied American homes were over 40 years old.
Experts: Remodeling projects bouncing back in 2015
After a healthy spike in 2013, home remodeling projects hit a bit of a lull in 2014. “Remodeling projects and expenditures are back on the decline this year as housing market conditions and fading tax incentives cause more home owners to delay projects once again,” RealtorMag.com reports.
This condition appears to be temporary. “The home remodeling industry is expected to continue its path of moderating growth,” Kerry Donohue of The Joint Center for Housing Studies of Harvard University writes. “The LIRA (Leading Indicator of Remodeling Activity) projects annual growth in home improvement spending to ease to 3.1 percent through the second quarter of 2015.”
So what’s getting remodeled?
Today’s most popular projects, according to the 2014 Remodeling Cost vs. Value Report, include entry door replacement, deck additions, attic bedrooms, garage door replacement, window replacement and basement remodels. These projects also tended to have high return on investment for the homeowner, bringing anywhere from 10 percent to 38 percent ROI per remodel.
How much does all of this cost?
As expected, none of the remodeling projects are necessarily cheap. Some examples of average project costs from the Remodeling report include:
- Back-Up Generator: $11,742
- Attic bedroom: $49,438
- Basement Remodel: $62,834
Nine of the top 14 remodeling projects fell into the $5,000 to $25,000 range, which, if not inexpensive, aren’t ridiculously pricey, either. Remodeling investments were highest in the Pacific Northwest, where an average of $49,014 was spent per project, while the East North Central states checked in the lowest at $40,378 per project.
What’s trending in the remodeling industry
Remodeling trends for 2015 are exciting enough to make the price tag more palatable. Consider some of these predictions from design and living experts:
Vintage, charming and convenient remodels.
Willamette Living – “the lifestyle magazine of Oregon’s Willamette Valley,” the tony wine region south of Portland and smack in the middle of the nation’s current remodeling hub – makes a strong case for warm wall finishes and accents made from reclaimed barn wood, chalkboard and other charming materials.
Touchless faucets and hot water dispensers make hydrating delightful. Deck pavers last longer and are quite a bit cooler than traditional deck materials like wood or cement. Layered lighting and under-cabinet lighting soften a room. USB charging stations are a modern must.
Free Style + Organic Kitchens.
HGTV’s Anne Kruger feels strongly about Free Style kitchens, noting “Because we’re spending more and more time in our kitchens, there is a move away from the all-or-nothing ‘fitted’ look of continuous counters. Look for more freestanding pieces of furniture or features with furniture-like qualities, such as a cabriole leg holding up a kitchen counter.” Kruger also take note of the movement towards artistic custom kitchens, eco-friendly appliances and round, organic shapes. “Imagine,” she writes, “never bumping into a sharp corner again.” Nice.
Add space, be sensible.
Hampel recommends expanding kitchen space and building a master suite above the new addition – “you have one foundation, one roof, but more living space.” He also advises sticking with the “tried and true” as opposed to bleeding-edge trends. “Concrete countertops sound really cool,” he says, “except when they break and stain.”
Self storage and remodeling
Self storage can be a real boon during the remodeling process for two reasons: 1.) you will probably need to temporarily move your stuff off-site while a specific project is completed, and 2.) once you’ve remodeled a garage, basement, attic or room, do you want immediately refill that space with all of your stuff? As M. Anthony Carr writes, “Remodeling is more about shoveling out the junk than anything else.”
Before beginning a remodeling project, consider these strategies:
- Keep / donate / toss. Keep only the possessions that you actually use. Donate anything collecting dust. Toss anything that functionally impaired or would require a MacGyver-style hack job to fix.
- Plan how your remodeled space will work. Visualize and plan how the new space will look and function. If the current stuff stored in that area does not fit that vision, it’s time for self storage.
- Have a team meeting. Talk to your fellow home dwellers and come to an agreement how the new space will be used. Set rules for how it can and cannot be utilized.
Talk to us!
Have you been through a remodeling project? Do you have any tips, ideas or suggestions to share? We welcome your stories. Please feel free to leave us a note in the Comments section below or tweet us at @UncleBobStorage.