3 top reasons to remodel now
Many factors contribute to your ability to get the best deal on
your home improvement project. While timing is one of those factors that
you can't control, there are three lucrative reasons why you might want to hire
a contractor now rather than putting off that remodeling job until next year.
|3 top reasons to remodel now:|
Lumber is cheap
According to the Western Wood Products Association,
an organization that represents lumber manufacturers, demand for lumber is expected
to drop by 7.2 percent in 2007. Repair and remodeling use of lumber is expected
to drop nearly 6 percent this year.
The main reason for the
drop is the slow housing market, says Shawn Church, editor of Random Lengths,
a newsletter that monitors the lumber industry. Construction is down, so lumber
mills have too much supply, so they've cut prices to move more product.
seen prices fall throughout the second half of 2006 and on into 2007," says
In March, the Random Lengths Framing Lumber
Composite was at $283, down from $373 a year go. "It was a good $90 higher
a year ago," says Church.
While such news is devastating
to the lumber industry, "From a consumer standpoint, lower lumber prices
are a good thing," Church says. A renovation project is made up of two types
of costs: parts and labor. If the wood products needed to complete a project are
less expensive than those same products were a year ago, the homeowner who does
their project this year may end up paying less than his neighbor who had the same
type of work done last summer.
If contractors have to spend
less money on supplies, they may be more willing to negotiate downward on the
price of an improvement job. "Professional contractors know what they're
paying for materials," says Amal Bendimerad, a research analyst for the Joint
Center for Housing Studies at Harvard University. "If they see that they've
got a little bit more leeway there, they may be a little more willing to eat some
of that profit."
While the window of opportunity is there,
it might be closing. Though real estate forecasts don't predict a huge upswing
in the market in the near future, lumber prices might not stay low for long. "Mills
have responded by reducing production of lumber -- by bringing production more
in line with the lower level of demand," says Church. Once the mills adjust
to the slower market, there will not be such a surplus of lumber, meaning prices
might once again rise more steadily.
Home equity levels remain high
A slump in the real estate market
typically affects the home improvement market. With home equity growth remaining
flat, fewer people may be willing to pull money out of their homes to finance
remodeling jobs. According to the National Association of Home Builders' Remodeling
Forecast Report, growth of remodeling expenditures is expected to be moderate
this year, after a strong 2006.