2020 became the year when people wanted to remodel: faced with many reasons to spend more time at home, from e-learning, to working remotely, to socializing at home, people wanted to use their homes to the best of their ability. Making your home an oasis of fun and comfort came with steep costs this past year, a survey from HomeLight’s results reveal. Top real estate agents reported back that, while remodeling has had a persistent appeal through the end of 2020 and verging into 2021, the idea of creating remodels with the plan to recoup costs in a future sale may not be the best one right now.
Wood Shortages and Supply Chain Hang Ups
With more-than-anticipated demand for remodeling and hiccups in global supply chains due to COVID-19 restrictions, timber costs have been very high this year, as have many other important supplies. More expensive has been the labor costs, where remodelers who are booked very far in advance can charge a higher premium or choose to focus on high-return projects. All of this has resulted in projects that have been more expensive than in prior years.
Higher Costs = Lower ROI
As a room addition, a remodeled basement, or a new back deck is added to your home, you’re likely to see at least some benefit in the overall value of your home, since potential buyers may be looking for that feature and would pay slightly more for it. However, it rarely equates to a 100% recoup of costs, even in the best of circumstances. For expensive, large remodeling projects, the ROI was already not as high as homeowners hoped. Now, with additional labor and materials costs during the pandemic, the ROI is lower.
Prioritize Remodeling Options That You’ll Use Personally
All that being said, if you aren’t looking to sell your home but are instead adding a feature that will make you happy in it for years to come, you’re likely to get your money’s worth. ROI in terms of personal use and enjoyment is much harder to quantify, of course, but if you get the benefits of a remodel for many years and then get a modest price bump when you eventually sell, it’s much easier to see a remodeling budget as money well spent. Many people, as the numbers show, have decided that the pandemic premiums are worth paying because they are helping families to make good use of their time at home.
If you do proceed with a remodeling project, consider alternate products like composite decking, work with a remodeler very far in advance to get scheduled, and focus on remodeling efforts that will be as useful after pandemic restrictions ease as they are now. If your family is likely to continue making use of a sunroom or a new spare bedroom, even higher-than-usual prices may equate to a good investment.