Friday, January 9, 2009

Building Equity in Your Home



2009 Started with a universal sigh of relief that ’08 is over and that we can start looking towards a better economy; though we may not be out of the woods yet. The 2008 overall numbers for new construction and existing home sales rank among the lowest recorded in the last 50 years. Most markets have seen a substantial decline in value of there homes with the median home price declining from 203,000 to 189,000. Most economists agree that 2009 will be a continuation of the last year and we will not see house gains until 2010 or longer. So what should we all do?

Investors often talk of the way to make money is to buy low and sell high. Then the question is, how do we know when the low part is? I think we all would agree that it is right now. Now is the best time to purchase or remodel a home. It is the absolute worst time to sell one, so please get that thought out of your (remember the idea is to sell high). Starting a remodeling project in the bathroom or kitchen area is the best place to start to recoup the lost equity from the past year. When the market begins to improve in a year or two, you will be well positioned to take advantage of the up swing. Desperate times call for desperate measures, so most contractors and suppliers are cutting margins to increase sales plus they have more time to devote to your project than they had two years ago.

Recently, three articles were published describing why this might be the right time to start a remodeling project. Please check them out and we have copies in our Montrose showroom if you would like a hard copy.

http://online.wsj.com/article/SB122606872452008595.html

http://www.oprah.com/article/oathome/200812_oah_singletary

http://money.cnn.com/2008/11/18/real_estate/renovations_sale.moneymag/

Though it is a great time to shop around for deals on cabinets and countertops, I would be weary of desperate sales people and firms that don’t have an office or showroom. At Kitchen & Bath Designs, we predict that many of our fly-by-night competitors will be closing their doors in the next fiscal quarter. You would hate to see your deposit and dream kitchen disappear, we have seen it happen.

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