As a Colorado Springs remodeling contractor, I am often asked which rooms of the house have the greatest impact on resale value. A realtor might be more aware of the statistics in terms of home sales, but there are some very helpful tools to determine if you should remodel or relocate. Like any major investment, it always comes down to cost vs. benefit.
Should You Remodel or Just Move?
After several years of steady declines in spending on home remodeling projects, the numbers started climbing in 2011. Contractors had anticipated this trend after the 2010 Remodeling Sentiment report came out, which revealed that 13 percent more homeowners said they would remodel in the next year. Since then, despite a sputtering real estate market, the upward trend in remodeling has helped many contractors remain in business.
One major drawback to the housing crisis for homeowners was the decline in home values, which reduced the amount of available home equity for borrowers. But this was just a "hiccup" when compared to the prospect of selling a home at a loss.
According to a survey of some 5,000 homeowners, here are some of the latest trends in home remodeling:
Instead of the common projects like remodeling the kitchen, adding a bathroom has become the most popular projects. For many homeowners, fixing up an existing room is often seen as a luxury, while adding another bathroom is a necessity. By and large, consumers have gotten a lot more practical about spending money on home improvements.
Rather than hiring a contractor, do-it-yourself projects have become more popular with some homeowners. Of course, not everyone can act as their own general contractor, but the trend has remained steady because of the economic downturn.
Homeowners are more economical in their choice of materials. The number of homeowners who reported using expensive building materials has decreased in the past five years. Overall, the percentage of homeowners using average costing materials has held steady.
The number of consumers who are "excited" about remodeling continues to climb, primarily because so many homeowners waited it out until they felt the recession was over. Delaying a remodeling project turned out to be a good idea, since the cost of the average project is now 20 percent less than it was in 2006.
Is Now a Good Time to Buy?
While there are still many reasons to remodel, it wouldn't be a bad idea to consider relocating as well. First time homebuyers have a unique advantage in that they don't need to worry about selling a home. Mortgage rates are lower than ever, and real estate analysts expect to see higher prices next spring, so now would be a terrific time to buy a new home.
Below are some recent facts regarding the Colorado Springs real estate housing market.
- Building permits are up 53% from the same month last year, which puts the Colorado Springs new home market on pace for its best year since 2007.
- Foreclosures are down 8 percent from this time last year.
- At $211,650, the median Colorado Springs home price is up 14.4 percent over the same month last year, which is its eighth consecutive month increase.
- Home sales are up 4.7 percent over the same month last year.
- On average, homes are on the market for 78 days, which is an improvement over the 91-day average for the same month last year. There are also 11.3 percent fewer homes on the market this year.
- In 2012, out of the 7,777 homes sold through the end of October, only 8.5 percent of the total home sales have been short sales.
- There continues to be a large number of cash buyers. In September and October 2012, about 15 percent of the buyers paid in cash, which is a good sign for the market.
- By the end of October, there was a five month supply of available inventory on the market; another sign that the Colorado Springs real estate market has started to stabilize.
Whether you decide to remodel or relocate, the good news for 2012 is that the Colorado Springs housing market is trending better than it has in quite a while. Buyers are less concerned about future home prices and homeowners are feeling confident about remodeling.
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