To continue on with our 2010 predictions, I’d like to project that this is going to be the year of home renovation…with a twist.
Everybody knows that homeowners need to, from time to time, reinvest in their homes, whether it be upkeep or improvements, but ever since the housing market “corrected itself”, a couple things have changed. #1. Every other person you meet today is no longer a “flipper,” and #2. Home building and renovating has pulled the proverbial e-brake. While I have to say that I’m somewhat relieved about #1, I think that the market has eased up on the brakes and this is going to be the year of home renovation, but with a new twist…homeowners will do it hybrid style!
What is hybrid home renovation? It’s simple. Homeowners will repair/renovate what they can on their own, then hire someone to do the rest. Let me give you an example. The lighting in our kitchen was a complete disaster, much so that I feared my wife could cut herself whilst chopping veggies, preparing dinner. So I removed all the lighting fixtures that needed to be replaced and even all the switches (btw, dimmers rock!) Then, when it was time to rewire the electrical…well…being that our home was built in 1934, it wasn’t good. I gave my best shot and quickly realized that I needed an electrical professional to complete the job. This is a microcosmic example, but I believe more homeowners will apply this to larger jobs, such as a bathroom remodel. Fix-its like changing out lighting fixtures, replacing medicine cabinets, and painting, etc. might be doable for most people, but when it comes to plumbing, ripping out and replacing the old gross bath tub and shower, or setting tiles, bringing in a pro might save a lot of time and money in the long run. Thus, renovating hybrid-style!
Why will homeowners do this? Because approximately 11 million households, or 23% of homeowners with a mortgage owe more on their home loans than their home is currently worth. What’s worse? We’ve recently had some of the lowest mortgage rates in history and many people can’t take advantage of them because they have no equity in their homes. Ah! Here lies the opportunity! If they can find a more affordable method of doing upgrades that will boost their home value (i.e. hybrid renovation), they will have a better opportunity to either sell their home or qualify for a better mortgage. This is also great for builders as it will generate some desperately needed work .
So, let’s pass on the word: hybrid….it’s not just for cars anymore.