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Home Improvement Guide 2007
Get ready
Before starting any home improvement project, research and planning is the key to successful results.
Remodeling costs depend on location
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And while labor costs are lower in the South than in the West, an increase in demand for remodeling "will increase the price," says Winans.

In some cases, homeowners are also doing more -- which can increase those averages.

Houston-based remodeler Michael Strong has seen the average job increase from $33,000 in 2005 to $38,000 in 2006. While prices are up, that's not the major reason for the hike.

"People are doing more," says Strong, vice president of Houston-based Brothers Strong Inc., and trustee for the National Association of Home Builders Remodelers. "The cost increase is probably not even a quarter of that difference."

In New England and the Northeast, the housing stock is older, and the logistics of a remodeling job can be more challenging, says Winans. And that can raise the price of a remodeling job.

In the Midwest, both costs and demands are "fairly level," but the economy is depressed, he says, "so prices will be dropping."

In Michigan, where building is already down because of the economy, remodelers are seeing a 5 percent line item on supply bills to cover increased fuel costs, says Brindley Byrd, member of the NAHB Remodelers board of trustees and president of Qx2 Inc., in Lansing, Mich. "It's the main reason costs are going up."

With everyone who handles (and transports) supplies prior to the contractors raising prices to cover fuel costs, "it's almost a double whammy," says Byrd. "There's no way a responsible contractor can't pass it on to the consumer."

In his area, the price of some components, such as granite countertops "are becoming more affordable because of the influx of supply," says Byrd. And prices on exterior building supplies, such as roofing and siding materials, "have stayed flat," he says. But locally and nationally, other mainstays, such as drywall, steel and concrete, have gotten much more expensive. Copper was so expensive that, for a while, electricians were using aluminum instead, he says.

It's the economy
As with home sales, the local economy impacts home remodeling, too. When home values start rising more slowly or plateauing, "The emotional impetus to invest equity into the home diminishes," says Winans. In the Northwest, where home values are increasing, Winans also predicts a strong market (and increasing prices) for remodeling. Rising equity "is the single biggest driver," he says.

But sometimes a slow housing market fuels remodeling, says Michael Nagel, national chairman of the NAHB Remodelers and president of Chicago-based Remodel One Inc. "When the housing market's down and people are not moving, they want to fix their homes up," he says.

-- Posted: April 4, 2007
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