Home improvements during a recession? makes “cents”

The housing market may be deep in this recession, but that doesn’t mean homeowners are, or should be, checking their pockets tight when it comes to remodeling their existing homes. Smart homeowners know that in this buyer’s market, fixer-up homes can’t compete with a glut of affordable, foreclosed, and bank-owned properties; it makes sense to make your home as marketable as possible.

a stimulating idea

Here’s a good reason to do some home improvements now: You can get some money from the government. President Obama’s February 2009 economic stimulus package includes tax credits for homeowners who invest in energy efficient upgrades. For qualifying garage doors, for example, you can earn up to $1,500, not to mention the savings you’ll see on your energy bills. Tax credits reduce your taxes dollar for dollar.

The economics of home improvement

Why spend the money on remodeling now, when times are already tough? It is a simple matter of supply and demand. Builders and contractors are hurting right now, which means they are now offering their services at lower prices these days than they could in a better market. Not to mention, supplies like lumber, drywall, or concrete can be found at lower prices now than just a couple of years ago. In fact, you could save anywhere from 11 to 22 percent on home renovations in today’s economy, depending on the size and scope of the project.

This means that while the average remodel project sees a return on investment of about 80 cents on the dollar, your savings on supplies and labor could yield an even bigger return when the market picks up, multiplying your selling power. Now there is some good economic news.