Figure 1 - Planning a home renovation
Why is a recession a good time for homeowners to improve their properties?
There are many reasons:
- During a recession interest rates are lowered (this helps get the economy started again). Hence, borrowing money to due the work required will cost you less.
- One of the biggest signs of a recession is a much lower number
housing startsContractors who have been busy building new homes will now be actively looking to contract renovations and remodels in order to keep their men working and stay in business during the recession.
- Many contractors will have no choice, but to layoff qualified workers in order to survive the recession. A large percentage of these individuals will take on remodel and other home improvement projects to earn a living.
- Manufacturers of building materials are not selling as much product because of the lower
housing starts. In order to keep their plants running they will reduce their prices. Lower prices from the manufacturers mean lower prices at the retail stores.
- Governments, in order to pump money into the economy offer grants and other incentives to homeowners.
- Retailers also need to drive the fewer dollars being spent to their stores. During a recession people spend less money, hence not only will retail prices of building materials fall because the manufacturers are lowering their prices, but they will fall because the retailers are fighting for the fewer retail dollars available in the market.
This includes all facets of home improvement, inside and outside of your home, including landscaping, decks and swimming pools. It encompasses all of the trades and professional services from architects to plumbers and electricians.
Items 2 and 3 are very beneficial to a homeowner, the more contractors and workers fighting for your business, the lower the prices for the work to be done.
And, I am sorry to say that some retailers will not survive the recession. Troubled retailers lower prices and have super sales. The key for the homeowner is to keep their eyes open for specials in all areas of home improvement, from window treatments to flooring.
The common scenario during a recession is do not panic, your investments will come back. This may be true. However, investing in your property provides you and your family with added comfort, possibly lower energy costs, and possibly better security, depending on what your home improvements or renovations entail.
If you can save 20 to 30 percent of the costs of a home improvement during the recession, think how that will multiply when the economy does come back to life.
Few people want to see a recession, however as individuals their is little we can do to stop it from occurring. And, if that is the case, we may as well take advantage of the situation.