With home prices skyrocketing in the Portland area and costs for materials like lumber continuing to go up, thinking about a home remodel can be daunting. Here we break down some pros and cons of kicking off a home renovation project in the current environment and answer the question: “Is home remodeling worth it right now in Portland?”
Three reasons why now may not be the right time for you to remodel in Portland
1. You plan to sell soon after the remodel
If you’re considering a major remodel, like a brand new kitchen or master suite or both, then you plan to sell your home within a year, that may not make great financial sense right now. You’re likely still going to have to do some repairs if you plan to sell your home — like paint touchups or landscaping — but doing major renovations just prior to selling probably won’t result in a recouping of those funds. Typically, kitchen and master bathroom remodels result in around a 75-80% immediate return. In order to make up the rest of that investment, you’ll likely need to stay in the home for a few years.
The exception here is if you’ve just bought a home at very low price with the intent of flipping it. In that case, the home needs to be remodeled before you sell, and if your purchase price was low enough, you should be able to recoup your renovation costs right away.
2. You’ll be stretched too thin financially
Another reason why now may not be the right time for you to remodel is if you’re operating on a tight budget. This is a great time to do some research and discover what different types of remodels cost, but trying to do a home renovation project with limited resources may be challenging in this environment. A major factor here is that the price of many building materials, including lumber, has gone way up in the past year. That’s resulted in higher project costs in many cases. Another reason is builder availability. Many local firms, Lamont Bros. included, are booking projects into the fall and into 2022 right now. That means if you have multiple spaces you want to remodel, it can be harder to break up the cost by doing them in phases. It’s still possible to do so, but they may simply take longer to complete.
Also from a financing standpoint, the renovation will likely be cheaper if you wait and try to bundle your projects together, than if you try to finance them separately.
3. You’ll be experiencing a major life chance in the next 2-3 years
Are you planning to have a baby or are your kids going off to college in the next couple of years? Maybe you’re planning to retire soon? If any of these life changing events are on the horizon, and they have you thinking about moving, it may be worth holding off on major remodels. As we mentioned, the high demand for remodeling firms locally means it may take a year or longer to get your project done. In this situation, it may make more financial sense to remodel your next home to make it the way you want it, rather than pouring that money into your current one.
Three reasons why now may be the perfect time for you to remodel in Portland
1. Instead of moving and paying way above asking price, reinvest in your own home
When you’re considering a remodel, it’s a good idea to weigh it against your other options, which are typically 1) you can move, or 2) stay in your home and try to live with the things you don’t like about it.
Moving in the current Portland housing market is challenging. Homes are routinely selling for way above asking price and buyers are often being forced to battle several competing offers. When you’re faced with having to offer much higher than asking, it can make more sense to instead put that money back into your own home so you can remodel it to your tastes.
If your existing home has potential, you can often achieve the same lifestyle changes as moving, but without the extra cost and headaches of listing and selling your house.
2. You plan to live in your home for several years
If you plan to live in your home for more than a couple of years after the remodel, then it’s likely worth it to make those improvements now. After a few years, chances are the appreciation on your home will cover the investment you made in your remodel and allow you build even more equity. So even though things like lumber prices are high, other financial factors like low loan rates are still working in your favor for now. That many not be the case in a year or two.
3. Moving to a new home may still require some remodel work
As we mentioned, it’s a sellers market right now, leaving many buyers having to shell out more than they normally would to buy a new home. To compound the issue, often when you move, the home you’re going to be living in will require some remodeling itself. Rather than maybe having to move a new neighborhood or school district and into a home whose potential pitfalls you’re not familiar with, it can be worth it to remain in your home and customize it to your tastes.
Are you planning a home remodel and aren’t sure where to start? We’re happy to discuss your project. Simply schedule a conversation with us!