Through the economic downturn, appraisers were not considering the worth of many remodeling projects. Updated roofs, structural components and systems still carried weight but improvements in kitchens, bath, flooring and the like were largely ignored.
Lately it’s been noticeable that most upgrades including cosmetics, are again being factored in, as was the case before the housing crash. This is encouraging because these things do indeed add value. When real estate sales were at their most sluggish, the condition of a home played an enormous roll in its marketability. Today, it’s easier to find a move-in-ready home to suit your needs.
According to the statistics below, home owners are recognizing the intrinsic value of condition like never before. If you’re entering the housing market as a buyer, this is great news for you.
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Home improvement spending is projected to pick-up pace moving well into 2016, according to the Leading Indicator of Remodeling Activity (LIRA) released 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 2.4 percent last quarter to 6.8 percent in the second quarter of 2016.
“Home improvement spending continues to benefit from the last years’ upswing in housing market conditions including new construction, price gains, and sales,” says Chris Herbert, Managing Director of the Joint Center. “Strengthening housing market conditions are encouraging owners to invest in more discretionary home improvements, such as kitchen and bath remodeling and room additions, in addition to the necessary replacements of worn components, such as roofing and siding.”
“Although we expect remodeling activity to strengthen through the first half of 2016, further gains could be tempered,” says Abbe Will, a research analyst in the Remodeling Futures Program at the Joint Center. “Current slowdowns in shipments of building materials and remodeling contractor employment trends, as well as restrictive consumer lending environments, are lowering remodeler sentiment and could keep spending gains in the mid-single digit range moving forward.”
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Reprinted with permission from RISMedia. ©2015. All rights reserved.
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