Is now the right time to finally make those renovations to your house?
Every quarter the National Association of Homebuilders (NAHB) announces its Remodeling Market Index (RMI) which measures the current state of the remodeling market based on the activity that remodelers report.
If the index is above 50, it means more remodelers reported activity to be higher in the current quarter than in the previous quarter, while also taking into account future activity.
In the third quarter of 2013, the index moved from 54 to 58. The reading of 58 was the highest since the first quarter of 2004, and it was actually the highest reporting since the RMI was created in 2001, as shown in the chart below:
NAHB Remodelers Chairman Bill Shaw credited this reading to "the growth in home equity and home sales," which prompted home owners to remodel as they prepare to move or undertake upgrades that they put off during tough times."
The Chief Economist of the NAHB, David Crowe added "in addition to existing home sales, which support remodeling activity as owners fix up their homes before and after a move, remodeling has benefited from rising home values. This boosts home equity that owners can tap to finance remodeling projects."
Knowing renovation is on many people's minds as the economy improves, I recently sat down with Ron Branch, Principal Architect at Studio 1616 in Charlotte, North Carolina, to discuss his thoughts on the renovation process, and a few things to keep in mind before you approach a renovation project.
1. Have clear goals before you begin
Ron noted renovations "are about taking a structure or a house and making it your own, and the ultimate goal is making it a much better place than when you started."
He highlighted the need to have distinct goals when talking with an architect. For example, some may have the desire to renovate their home for the sole purpose of making it a more attractive property when they sell it in a few years, but many others approach home renovations knowing they are doing it to make their homes more functional and to improve the quality of their lives within their households.
While the goals don't have to be intricate or specific, there should at least be a general understanding of what both the purpose of the project is and also a general idea of what is needed to get there. Whether it be the addition of a bedroom for a child on the way, or simply taking existing space and repurposing it to make the home more functional to personal needs, there should always be goals before the process begins.
2. Have a budget when you start
In addition to having goals, Ron noted it is also important to approach any project with a budget that can allow you to actually accomplish those goals, as "the budget is a big deal...and it is important to understand how the budget corresponds to what you want."
Ron cautioned there can often be great frustration from both those having their homes remodeled and those doing the remodeling if there is a major disconnect between the goals and the budget needed to accomplish those goals.
While the contractors to which the renovations are entrusted are the ones who actually dictate the final pricing, being forthcoming with the architects about the budget will allow them to better design plans suited to the needs of the customers within the parameters of their budgets.
3. Understand the process is fluid
As with anything, a home renovation can indeed be a process that is full of surprises and unexpected changes.
Ron noted clients can approach the process with one goal in mind, but after further conversation realize they would like to move in a different direction. Ron highlighted that it is very important to, "move into a renovation knowing that it is a very fluid process and surprises do occur," but ultimately understand it can be a vastly rewarding and fulfilling process that lets those who are having their homes renovated get further enjoyment out of their homes and ultimately live better lives within them.