It seems as if most of Arizona is under construction. New homes and apartments are popping up everywhere. That’s great news for construction companies, their employees, and people wanting to move to Arizona or buy a brand-new house.
However, there is a large number of new home permits missing nationwide, upwards of 1.2 million less than what would be needed to support growth, and with the interest rates still being where they are for at least another 12-18 months, the remodeling industry could see a boon in activity.
More Challenges
Because interest rates are expected to rise over the next 12-18 months (currently 7.74% for a 30-year fixed mortgage, as of October 2023) and the low number of new home-building permits, the trend is for homeowners to stay put and invest in their existing homes as the “new” one will be much more expensive in light of the last decade of appreciation and today’s interest rates.
If you are having this conversation with yourself, know you are not alone. Millions of homeowners across the country are having the same one. Sure, the interest rate is still high for a home improvement loan, but that loan is likely to be considerably less than a new home loan.
Remodeling
If not buying a new home and staying put is what you decide to do, the conversation then becomes what are the most critical areas of improvement or modification that should be the priority? What seems the most broken? Is it dated finishes, a clumsy floor plan, or a repurposed space?
Who can help with this analysis?
Realtors, showrooms, distributors, and referrals you collect from others who have already gone through this process can help you determine whether buying a new home or remodeling your current home is the best option.
If you decide to remodel your current home.
Before hiring a contractor, start the process with Rosie’s How To Choose A Contractor Consumer Guide which outlines the steps from checking the Arizona Registrar of Contractors (ROC) website to interviewing, and digging deep into a prospective contractor.
There are nine critical questions you need to ask a potential contractor.
Of those nine, the most important is whether they are licensed by the ROC. Choosing an unlicensed contractor leaves you without recourse should the contractor fail to keep a timetable, provide poor-quality workmanship by cutting corners, or simply take your down payment and never return to the job. Besides, contracting without a license in Arizona is illegal.
A contractor that skips the permitting process will, not maybe, WILL, cause project delays that last months, if not years, and potentially cloud your home with hidden dilemmas and problems.
A lot of important work goes into the project’s preparation and design phase. This is where every detail, every material, and every fixture such as cabinets, colors, and finishes, are decided. Sounds like an ominous task, but with the right designer and contractor, you will be led step-by-step through the process of making your home look and feel brand new.
The design phase takes time. Your designer and contractor must be with you every step of the way, helping you make choices and decisions as they show you what your project looks like.
A qualified remodeler will convey what your remodel will feel like when completed. When choosing a contractor, selecting a firm with in-house design capabilities is important. Communication between the designer and builder must be clear and timely.
Considering that you went this route to save money, creating and staying within your budget is critical. Squash your inner cheapskate. Don’t shop for the cheapest price.
“If you are shopping for the cheapest price, there is nothing I can say to help you choose a good contractor,” says Rosie.
Check out Remodeling Magazine’s Cost vs. Value Report to establish the likely costs associated with several projects in your area. One piece of information you can glean is the potential return on investment, typically within a year or two from the date of the project’s completion.
Always do your homework. Whether you buy a brand-new house or remodel your current one, this is a huge investment that needs a lot of consideration and protection.
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PODCAST
In a period of high interest rates, there could be an option to use your ‘home’s savings account’. It’s called equity. Could you cash out by selling your home or use equity to remodel your existing home? Plus homeowner questions on water pipe hammering, pool waterfall cracks, cooling a hot attic and a listener was surprised to hear what his insurance company will do if he installs a metal roof.
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