| Many homeowners are asking themselves the above | | | | contractors available is decreasing. In addition, |
| question. Many consumers and business owners are | | | | investors buying distressed homes and first-time |
| asking the same question when it comes to buying a | | | | homebuyers (taking advantage of the lowest interest |
| new car or new computer. The media displays | | | | rate in years) are likely to increase the demand for |
| catastrophic images of falling home prices, melting | | | | such qualified contractors. The increase in demand |
| real estate market. Recently the media is taking the | | | | and the decrease in supply will result in shortage of |
| attack to the next level! The U.S economy is | | | | qualified contractors. The shortage will drive the price |
| doomed! We are going through a global meltdown! | | | | of home remodeling up. |
| While it is clear to everyone by now that the | | | | I am aware that many pessimists would critic the |
| economy is slowing down, home values are indeed | | | | above argument. While I do not deny that the |
| falling, and the financial crisis is real. However, it is | | | | argument could be questioned, I would like to |
| unclear how severe is the slowdown? How far are | | | | suggest the following example. |
| we from the light at the end of the tunnel? How low | | | | A few months ago, the auto dealers were struggling |
| did home values get? Did home values revert back | | | | to convince consumers to buy SUVs even though |
| to 1990s level? Are we at a bottom? | | | | the prices of those cars were at very low levels due |
| The level of decline differs from one state to | | | | to the insane $4 a gallon gas price. Today, only |
| another and sometimes between one city to another. | | | | couple months later (not years...) the very same cars |
| In northern New Jersey for example most homes | | | | are selling at much higher prices as people are no |
| have declined by 15%-20%. | | | | longer worried about gas prices and prefer the |
| A typical $420,000 home have declined to around | | | | convenience of SUVs over the tiny gas saving cars. |
| $350,000, that is 17% decline. | | | | I am not implying that the housing crisis will be over |
| On the other hand, a typical bathroom remodeling | | | | in couple months. No one knows exactly when it will |
| used to cost anywhere from $10,000 to $14,000. | | | | end but as long as you are able to afford the house |
| Nowadays, a typical bathroom remodeling is priced | | | | (housing payment about 30-50% of your income) |
| between $6000 to $8,000 - about 50% decline! | | | | you will benefit from buying a house and remodeling |
| Many value driven consumers know that now is the | | | | it. |
| best time to remodel their home. The low cost of | | | | If you already own a home, taking advantage of the |
| home remodeling would not stay that low for a long | | | | low interest financing offered by many retail |
| time. As some of the fly by night contractors (that | | | | showrooms and contractors will help you remodel |
| came about during the sub-prime wave) are going | | | | your home at great prices while not having to worry |
| out of the business. Further, the amount of qualified | | | | about denting your cash position. |