A semi-annual survey of 5,000 U.S. homeowners, the "Spring 2009 Remodeling Sentiment Report", from Sunnyvale, CA-based RemodelOrMove.com, reveals four times as many homeowners answered "probably not" when asked if they will remodel this year, as compared to the 2007 survey.
In this most recent survey, 68 percent of participating homeowners reported that they probably would remodel this year, down from 84 percent in the fall 2008 report and 92 percent in 2007.
Previous Remodeling Sentiment Reports indicate three times more homeowners than two years ago say that the economy is affecting their remodeling plans greatly, and 82 percent report that the cost of the remodel is a major concern.
The report is inline with research from Harvard University's Joint Center for Housing Studies, which says, in most parts of the country, home prices are falling, discouraging discretionary home improvement spending and diminishing the amount of equity owners have in their homes.
"Earlier this decade, the ability to borrow against equity created by rising home prices fueled remodeling activity, as well as broader consumer spending," says Nicolas P. Retsinas, director of the Harvard Joint Center for Housing Studies. "Now that prices have softened, owners cannot finance home improvement projects as easily. Even those with equity find credit harder to obtain due to tighter standards," Retsinas added.
The good news is that homeowners who choose to remodel their homes could find this is a good time to get the work done. With new home construction at low levels, more materials and labor are available for remodeling than several years ago, resulting in shorter project schedules and often lower project costs.
Planning now to get in a contractor's pipeline of work orders for the spring could also give a homeowner a negotiating edge. What's more, in a market with declining home values, home improvements are a good way to protect the value of your home and position it as a good value when it's time to sell.
The Sentiment Report also found homeowners are:
Excited about remodeling – 52 percent
Dreading remodeling – 12 percent
Planning to hire a general contractor – 65 percent
Homeowners' remodeling plans include:
Kitchen remodel – 52 percent
Bathroom addition – 55 percent
Bathroom remodel – 45 percent
Addition of one or more bedrooms or den – 35 percent
Enlarge or add a garage – 19 percent
Finish a basement – 13 percent
Harvard's Joint Center also suggests the best home improvements can help save money and the planet because they are "green." If we are going to meet the nation’s energy goals, we have to continuously search for ways to improve the residential built environment. The report demonstrates that maximizing energy-efficiency in existing housing may be one of our greatest challenges, but also one of our greatest opportunities given that homes account for almost a quarter of energy consumption in our economy," says Mohsen Mostafavi, dean of the Harvard Graduate School of Design, where attention to green design is a growing focus in the classrooms and studios. "Consumer demand for sustainable design is on the rise," Mostafavi added.