Recession remodelers can rack up big savings and help to turn around the economy at the same time. Some economists and realtors are saying housing prices have bottomed out. If they are right, any investment you make in your home (short of over-improving it) could reap big dividends as prices start to rise again. Yet there are even better reasons that a recession is the perfect time to remodel if you feel secure in your job and you have some extra cash.
The economy is linked to everything else, and everything else is linked to the economy. When the economy is riding high, so is everything else – manufacturing, distribution, sales, consumer spending, and both the producer’s and the consumer’s price index. The economy booms because people feel confident about spending money. When the economy goes up, unemployment comes down.
When the economy goes down, however, a whole interconnected mass of things go haywire. Unemployment starts to rise, which triggers consumer uncertainty, resulting in decreased spending on goods and services. This, in turn, leads to cut-backs in production, in new hiring, and in optimism. When consumer confidence is down, spending is down, and this leads to lay-offs, and further erosion of consumer confidence. These factors work together to create a sort of feeding frenzy of fear, reaction, greater fear and more drastic reaction.
The silver lining in this dark economic cloud is what happens to prices and what this can mean for consumers. You see, when consumers stop buying, manufacturers and retailers start slashing prices because they must have sales. Without sales, there is no money to pay employees, fund research and development of new products, or pay for parts and materials to manufacture more of existing product lines. People who provide services, like contractors, skilled workers and sub-contractors, find that there is less work because people are afraid to spend in a climate of economic uncertainty and job insecurity. Those who have the confidence and the cash or credit access stand to save a huge amount of money on the materials and the management and labor for their remodeling projects.
The home building and remodeling industry is just like any other industry during a recession: sales are down because confidence is down and people are reluctant to spend. This results in rising unemployment, and demand for goods and services dries up. The confident homeowner knows that recession remodelers rack up big savings and plans and proceeds accordingly. Here’s where the savings can happen:
  • Because of decreased demand, many building materials prices drop. For example, lumber prices are now at a sixteen-year low. Manufacturers and retailers need to move the product they have on hand, so they reduce prices, have sales, or offer special deals. The result is rock-bottom prices for recession remodelers.
  • Contractors, sub-contractors and skilled workers need to keep working. The best way to do that is to work for less money in order to keep working and keep some money coming in. The result for recession remodelers is the ability to choose the contractors and workers they want and get higher quality workmanship and lower cost.
  • Because there is less work – a smaller number of jobs – contractors are less likely to be working on as many projects at once. The result for recession remodelers is that the job gets done faster and often with greater attention to detail.
When homeowners add up these and other economic factors, it is clear that recession remodelers can (and do) rack up huge savings if they have the confidence and the cash to remodel during the downturn. So forge ahead and follow through on your plans to remodel. The result might be far more than you can even begin to imagine!