It appears that reports of the housing industry's death have been greatly exaggerated. Some sectors of the industry, such as home sales, continue to slump, but the home remodeling business is booming.
What do you get when you combine low interest rates with cheap labor and materials? The answer is taking place all around America: A remodeling boom.
As the federal government does everything it can to get money flowing and revive our slumping economy, homeowners are finally beginning to take advantage of exceptional market conditions. Home remodeling has become exceedingly hot.
Not everyone qualifies
Americans are still reeling, of course, from the economic meltdown. Many have lost their jobs or are up to their necks in debt. For the more prudent money managers, however, this is an ideal time to remodel, as long as they meet two conditions: they must have cash or home equity, and they must have a steady revenue stream.
Applicants with home equity must also have good credit to qualify for a loan. If they were financially responsible and didn't overextend themselves in years past, they'll find rock-bottom interest rates that make it an ideal time for them to borrow.
Home remodeling experiencing a perfect storm
Combine the low interest rates with dirt-cheap materials and homebuilders who are eager for business, and you've got a perfect storm for the home remodeling industry. The dirt cheap materials come courtesy of the slumping economy. With consumers reluctant to part ways with their money, retailers are forced to mark building materials down. Savings can be significant-more than 10 to 20 percent off what you would have paid a year ago.
Laborers have also slashed their prices. Home remodelers may be busy, but they're feeling intense competition from new builders, who are eager to enter the remodeling market now that new home sales remain stagnant, or in most cases, non-existent. As a result, builders are slashing costs and taking on smaller jobs. This might be a nightmare for established remodelers, but it's a terrific opportunity for homeowners.
The types of desirable home remodeling projects have also changed. During the past few years, major home makeovers were the norm across America. Home equity was plentiful, and people had plenty of credit to draw upon. Now, under the current economic conditions, homeowners are becoming more mindful of the size of the projects. Smaller, more practical renovations have taken center stage. With the passage of the stimulus package, you can expect to see more weatherization and energy efficiency projects beginning, too.
It's a great time for homeowners to remodel their properties. From low rates to even lower prices for materials and labor, it's the equivalent of bargain shopping. Expect the remodeling effort to continue if current economic conditions persist. Since the average homeowner no longer possesses the home equity to move to a bigger house, you can expect him to do whatever he can to improve his current residence.