Home improvements during a recession? makes “cents”

The housing market may be tanking in this recession, but that doesn’t mean homeowners are, or should be, watching their pockets hard when it comes to remodeling their existing homes. Smart homeowners know that in this buyer’s market, fixer-uppers 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 improvements. 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 suffering 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 they were just a couple of years ago. In fact, you could save 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 remodeling project sees a return on investment of about 80 cents on the dollar, your savings on supplies and labor could earn an even higher return when the market recovers, multiplying your selling power. Now there is some good economic news.