Are renovation costs declining?
Two weeks ago, the Wall Street Journal reported that contractors are reducing prices, adding perks, and providing discounts. Here’s why. If you’ve recently had any renovation work completed on your home, you probably have a sense of the home improvement market. Surging demand for renovation work has meant that costs are high, and that contracting firms can be hard to deal with. In most markets, contractors have been in the drivers’ seat for many years – they’ve been free to increase prices, to choose what jobs they take, and to dictate contract terms to their clients. But the balance of power may be changing. Over the past four years, decreasing interest rates resulted in an unprecedented number of refinances. Homeowners cashed out on their home equity, and directed the money into renovating or improving their homes. According to Harvard University’s Joint Center for Housing Studies, spending on home remodeling rose 20% from 2003 to 2004. While interest rates still remain low, they hav
