Are Home Owners Still Prioritizing Home Improvement With Rising Inflation?
Home improvement is often in the name of one of two things: performing much-needed repairs or adding some personal touches. Regardless of your ‘why,’ the heightened demand for housing means sprucing up your home can tack on a few more dollars to your asking price.
Granted, making sure you don’t go overboard with renovations is just as important. Many homeowners get carried away with their home improvement projects and end up losing track of their budgets altogether. They then find themselves stuck with a home that’s worth less than what they put into it. At the same time, inflation remains a pressing concern. While the US managed to beat inflation forecasts for April 2023, the prevailing 4.3% remains relatively high.
The Current State of the Home Improvement Industry
The early days of the pandemic exploded the home improvement market for plenty of reasons. Being stuck at home with stimulus checks created a frenzy for Do-It-Yourself home improvement projects.
Three years later, things are slowly winding down. Inflation, the continued supply chain crunch and rising labor costs all took their toll on the home improvement market, after all. It also didn’t help that those stimulus checks dried up after 2021.
What This Means for Sellers and Contractors
With inflation still rearing its ugly head and the supply chain issues far from resolved, DIY proponents and future fixer-uppers should remain cautious. They should check their project wish lists against their budgets before diving into renovation projects. In fact, many DIYers during the pandemic are scaling down their efforts at the start of 2023. Recently, the Joint Center for Housing Studies of Harvard University released its latest Leading Indicator of Remodeling Activity (LIRA) report. It said that after several years of double-digit growth, the home repair and improvement market will begin slowing down in 2023. From its 22.3% spending rate in 2022, LIRA predicts the rate will plummet to 2.6% by the end of this year.
While home repair and improvement projects slowed down, they didn’t come to a full stop. The soaring prices of newly built homes forced many homebuyers to consider buying cheaper fixer-uppers and making the repairs themselves. However, not all home improvement projects are equal. Some projects can actually help raise the value of a fixer-upper enough to flip it for a profit. For example, making improvements to the heating, ventilation and air conditioning (HVAC) system can make an old home more attractive to buyers. Minor kitchen improvements and complete paint jobs can also raise the selling price. Still, spending a lot on kitchen remodeling or bathroom upgrades just isn’t worth its weight.
Sellers and Contractors Need to Tread Lightly
Simply put, sellers of fixer-uppers need to start choosing renovation battles carefully. Buying a house for the low only makes sense if the renovation costs will add value. As such, sellers should sit down with their contractors to make sure they’re not diving in head-first. Similarly, legitimate contractors should be more than willing to walk clients through an updated bill of materials and labor costs before starting any renovations.
What Does This Mean for Homeowners?
As for homeowners, the shrinking supply of houses plus the rising cost of renovation costs should give them a reason to pause. Flipping houses only make sense if they have a house for themselves after the smoke clears. As a result, many would-be sellers have recently put on hold their plans to unload their homes. Even with many buyers lining up the block, they’re effectively waiting to see how the market turns out before looking at offers once again.
At the same time, the rising cost of turning a fixer-upper into a ready home makes the price difference negligible. Sellers will need to raise their prices to recoup their repair costs. If the final selling price hits closer to the price of a new home, buyers will more likely go for the latter. Many homeowners who purchased fixer-uppers soon realized that putting them back on the market isn’t proving as profitable as they’d hoped. That’s why many have scaled back plans for grand renovations and are just investing in the essentials.
Present Your Home Improvement Projects the Right Way with Ingage
Whether you’re a homeowner looking to flip your newly-renovated property or a contractor helping out with home improvement projects, it pays to have all of the information laid out clearly and completely. Having the right presentation software to provide clients with all the necessary details can help close the deal, at that.
Ingage is cloud-based presentation software that helps tell your story interactively and engagingly. For example, you can present dynamic before and after shots of your proposed repairs, let users zoom in on the details or even allow them to test out different color schemes and fittings. With Ingage, the power of interactivity is in your audience’s hands.
Even better, sharing your presentation with your team is easy thanks to Ingage’s cloud access. Team members can collaborate on a presentation even if they’re away from each other. Once you’ve completed the presentation, sharing them with clients is simply a matter of sending a link. This gives them the convenience of viewing the presentation at their leisure without clogging their inbox with large files. Afterward, you can use Ingage’s analytics features to gather insights on which sections engaged viewers and which areas need improvement.
Let Ingage take your home improvement presentations to the next level. See for yourself how easy it is to create an interactive presentation by visiting us and telling us about your company. Sign up for a free demo today!