Bigger remodeling projects for homeowners

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Not surprisingly, the past year under the COVID-19 pandemic has seen a sharp rise in home remodeling projects. Now. after a year, the projects are getting larger and many homeowners are turning to professionals to get the job done.

Analysts say there could be as much as a 10.7 percent sales growth in the remodeling industry as these projects get underway.

While this is great for remodeling contractors, there are still some problems from rising costs of building materials to disruptions in the supply chains and a. shortage of skilled labor to get the work done.

Remodeling just got more expensive

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The recent round of new tariffs is likely to result in a 7-8 percent increase in remodeling costs according to industry experts.

Products such as lighting, countertops, laminates etc. are commonly produced in China and the new tariffs will increase from 10 percent to 25 percent.

The National Association of Home Builders anticipates that many remodeling projects will be put off or delayed. Many contractors say that projects are already being scaled back.

Home Renovations Skyrocket

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According to a report in the Wall Street Journal low inventories of homes for sale in combination with continuing high home prices is pushing Americans to spend a record amount in home remodeling. In fact, Harvard University’s Joint Center for Housing Studies estimates that homeowners will spend $316 billion on home remodeling in 2017, up considerably from the $296 billion spend in 2016.

The report points out that most homeowners are using home equity or savings to pay for these renovations, a sign that they remain confident about investing in their homes.

However, analysts point out that when adjusted for inflation the amount spent in 2017 is signficantly lower than the $344 billion spent in 2006.

San Francisco Homeowners Like to Remodel

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According to a report from the Harvard Joint Center For Housing Studies residential home-remodeling registered an all-time high in 2016 – $221 billion – and San Francisco is on the of the country’s top-five remodeling markets with homeowners spending an average of $5,030 on improvements, nearly double the national average.

Not surprisingly, the other four top remodeling areas were New York, Denver, Washington D.C. and Boston – also among the country’s most expensive cities.

Analysts believe that as California’s buying market cools somewhat, the home improvements will also moderate.

On the other hand, baby boomers have shown that they prefer to remain in their homes as they grow older and will continue to spend on remodeling.