The Right Time for Home Improvements
No one needs reminding that 2020 was a year full of shut-downs, lock-downs and more business closures than anyone can count. Even for people who kept their jobs as an essential worker, the rest of the economy was closed down and pretty much kept them from doing many of the things they wanted. One area where people were nearly collectively shut down was in the area of home improvements. Not only did too few people have the extra money during a virus pandemic to improve their homes, but there also weren't many contractors and constructions crews in operation, given the fact that governments didn't really consider kitchen remodels an essential endeavor. Though in 2021, we're seeing the housing market start to bounce back in many areas, and so experts suggest that now might be the time to go through with those home improvements.
Having work done to the home is an essential driver in housing in general. It's not as if we live in magical lands with new lots popping up around us. We have a very finite amount of real estate. So, for the past century or so, one of the biggest driving forces of the housing market has been the freshly remodeled house appealing to a buyer, driving the price up in multiple markets and really spurring the economy.
Homes that are able to sell for higher prices support multiple industries, especially when they're remodeled. It supports those who create raw materials like lumber, siding, fixtures, etc; it also supports crafts and trades, all the way down the line to real estate agents. So when the market is vibrant and people are fixing up and selling their homes, it not only signals a healthy housing market but also a healthy economy. This is why economists and other experts in the industry are really pushing for more people to begin fixing their homes up and listing them for sale in 2021. It's a great way to really boost economic output.
Though why would more people risk such an investment during a time where we're told by media that the virus pandemic is still raging? There are a few reasons here that make economic and practical sense; though through it all, at some point we have to get back to living our lives as normal. It's not about ignoring the virus or refusing to take it seriously; it's about the fact that we all live together in these societies and have very finite lives. Boxing them up and refusing to live due to a virus with a 99% survival rate is really wearing thin on most people, and the market rebound in the areas like housing is showing that people are fed up with putting their lives on hold.
Another reason to make home improvements this year is because they're a lot more affordable. Remember, most of these construction companies were forced to shut down, and so now they're offering people discounts just to have work to do. You can get renovations and upgrades for about 20% cheaper than you could in 2019. Also, according to Freddie Mac, there's a shortage of new homes available on the market. This means that an updated home will command a much higher price on the open market, so the investment return potential is higher than ever.
The Surprising Resiliency of the Housing Market
Most experts were shocked at just how well the housing market held up during the pandemic. A lot of this was due to government dumping untold billions of dollars on these sectors that would have otherwise spurred huge interest increases in home payments. In order to make profit, the housing market could have collapsed easily with corporations looking to milk the homeowners. Instead, governments stepped in with spending packages and with timely freezes and moratoriums on things like increases and evictions. This allowed many people to weather the storm in their homes, and this spurred a lot of confidence in the housing market as restrictions began to loosen up.
One of the biggest fears of most economists at the height of the pandemic was that mortgage lenders were going to start evicting people left and right, and we would be dealing with a pandemic that was exponentially worse due to a collapse of the housing market. The market held up, however, and it has bounced back in a big way.
As of right now, it might be the best time in decades to go through with home improvements. They're more affordable for homeowners and are offering a bigger payoff for the investment.
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