Recently, I have been asked this question by a writer for a Better Homes & Gardens magazine.From many conversations with homeowners and builders alike in the past few months, I get the sense that this question is on the minds of many. It is most pertinent for homeowners considering ‘elective’ and high-cost projects such as a second story addition or a kitchen remodeling.

For homeowners needing to repair a leaking roof or faulty wiring this is less of an issue, as their respective projects are far less costly and are not typically elective (i.e., the work must be done without delay).So, is it (a good time to remodel)? Well, I certainly believe so! The argument against remodeling in a slow real estate market goes like this: because home prices are not increasing as they used to (and might still have some downward movement left at some locations) it does not make sense to increase ones investment in the property by spending money on remodeling. The Cost-vs.-Value equation is less attractive as, at current market conditions, less of the cost of the remodeling project considered could be recaptured.  

Well, I never subscribed to the ‘remodeling as an investment’ school of thought. Many other investments carry less of a risk and offer potentially better returns. Remodeling (especially major remodeling projects) is pervasive. It affects the family life in very significant ways and may last for many months. Real hardship is involved, many decisions need to be made throughout the project and sacrifices are needed from all in the household.  Furthermore, contractors as a group are not known for their timely performance or for their adherence to budgetary commitments. Disputes and ‘horror stories’ abound. Why, then, would anyone wish to consider a major remodeling project unless they really need it? Simply put – they shouldn’t. But, if the work is needed – if the family is growing and must have the additional space, if the kids have grown and need their separate bathrooms, if the dated kitchen needs to be redone so the family could all enjoy a wonderful new space – in such cases, the question of short-term ‘return on investment’ is irrelevant (rest assured that, in the long run, a well conceived and well executed remodel is indeed a worthwhile investment and will likely remain as such).   So, why is it a good time to remodel? The basic economic principal of ‘supply and demand’ is at play (as always). Only this time, it favors the homeowners!

With less demand and with oversupply prices tend to ‘soften’ and homeowners are in a better negotiating position as a result. In other words, the same project might cost less today than it did a couple of years ago. Additionally, the tight supplies of materials that resulted in both rapid price appreciation and long wait times are mostly a thing of the past. Likewise, quality builders and contractors are not scheduled as far ahead in advance. For homeowners, this translates into a shorter ‘lead-time’ before actual work may commence in their home. It has been many years since these conditions prevailed. This is a great time for homeowners to remodel!  

A word to the wise though: It has never been more imperative to choose a builder/contractor wisely! The marketplace is awash with out-of-work contractors who will go to great lengths to get your job. Consider though, that if they are so slow, there is a reason for it. Top tier builders and contractors are not out of work (they are not scheduled that far in advance either though). Homeowners should be extra careful not to engage a mediocre (or worse) contractor for their work. The seemingly ‘too good to be true’ deal they get will prove to be exactly that.   Be diligent and proactive when considering a contractor; check their Better Business Bureau and Contractors’ State License Board status for starters (don’t even think about hiring anyone with any issues on their BBB or CSLB records. Why should you, when there are enough candidates out there with spotless records?). Ask to speak with current and past references (make certain these are for projects similar to yours) and go look at some of their recent work. Insist on a detailed scope of work and a payment schedule that does not include payments in advance.

Ask about awards and media coverage. My advice? Select a contractor based on everything but price, and then make sure the price is in-line with your expectations and other bids. Your chances of having a successful project are far greater if you heed this tip.   Last, feel free to have a candid, ‘above-board’ conversation with your builder of choice about costs. I suspect you might be pleasantly surprised with your contractor’s willingness to work with you on that to your satisfaction.  

Good luck and happy remodeling!