We all saw the tremendous amount of renovation that went on during the pandemic, as people hunkered down to work, play, and live with extended family in their homes. Now that restrictions are lifting, the market is so hot that some cannot find new houses to buy. They may consider renovation instead, although raw materials have skyrocketed and there is a shortage of labor with a backlog of jobs. What should a person do?
The answer is, as always, it depends. The first thing to consider is how long you plan to stay in your current home. If you plan to stay a long time, you should spend that money you saved from the vacations you didn't take last year, because you will be enjoying the fruits of your labor for some time to come. If, on the other hand, you are thinking of retirement and relocation, your horizon is much shorter.
Along with that calculation, you should think more about the purpose and scope of the work you would do in a renovation--is it mainly for yourselves, or would it improve the resale value of your property? If so, what percentage of what you spend would be recaptured in a sale? The usual answers can be found in numerous charts available online, but the general principle is that quick fixes and cosmetic repairs recover total value, while more elaborate or specialized changes bring back less from future buyers. If your household, for instance, is composed of people all over six feet tall, and your renovation involves putting all of your kitchen counters up to a height you find comfortable, a new owner would probably figure that he or she had to replace them with lower ones. If you add a bath downstairs, or a patio to the back of the house, those would be considered safe to count on recovering. Painting and landscaping are almost always smart to do.
Will the pandemic permanently change buyer preferences? It's hard to say. Outdoor space may get a big lift, home offices will be much more common, but should that bedroom become a gym? That's less clear. Tastes do change over time. There are also generational issues to take into account. Your choices may not resonate with a young family, or your decorating ideas may differ from theirs. The latter can more easily be fixed, although they will affect how the house shows, when the time comes to sell, if they are extensive.
So, each person's conclusion may be different, but certain steps make sense. Think about time left in a house, personalization of the work to be done, family needs and desires, and cost of renovation vs. cost of moving. And then call your Realtor for his/her opinion--we answer these questions every day!
