Luxury is making a comeback, according to a report issued by RemodelOrMove.com. The site’s Fall 2012 Remodeling Sentiment Report reveals an uptick in the scale of planned home remodels.
“Multi-year highs in the stock market, home prices that are inching up, record low interest rates and pent-up demand for home maintenance are fueling this increase,” according to RemodelOrMove.com.
Key points revealed in the survey include:
* Homeowners are describing the materials they will use in their remodel as "expensive" at the highest rate since 2008.
* The scope and scale of remodels is the largest since 2007, with an average remodeling cost estimated to be $100,000. Homeowners are stating they will, on average, add or remodel more than three rooms.
* 35 percent, the highest number since 2008, of respondents are reporting that the economy is not affecting their plans to remodel.
* 73 percent, the highest percentage since the Report started in 2006, are planning to hire a general contractor. As the scale of the projects increase, the use of a general contractor typically increases as well.
Items of interest:
* Kitchen remodeling takes over as the #1 favorite remodeling project for the first time since 2008.This shift is another indicator that "luxury" is returning to what was a "practical" remodeling market.Many homeowners view a kitchen remodel as a luxury while a bathroom addition or remodel can be sometimes justified as a necessity.
* The wealth effect is helping to fuel this return to luxury as average home equity reported by homeowners taking this survey was $123,000 - the highest since 2009.
* The decision to remodel or move is increasingly difficult as the difference between the average cost of remodeling, $100,000, and the average price difference between their current home and their dream home, $113,000, become almost the same.The near-equal costs of remodeling their current home and the cost to sell what they have and move to a new home makes the remodel or move decision much more difficult.