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With the present slump of the economy, new home construction is at an all-time low. Property values across the nation have decreased substantially. The majority of people still want their American dream. But have learned from the recent economic downturn that renovating an existing home is becoming the new American dream.
As a practicing architect, I have experienced my client’s anxiety in deciding if they should do a construction renovation or build a new home. I have always advocated doing what one can afford. Regardless of the path, everyone should have a flexible program with priorities, develop a master plan, and try to do the work in stages. Homeowners can no longer afford to make one of the biggest decisions in their life in haste and cannot base it solely on emotion.
So the question is . . . should you renovate or build new? Since every situation is different there are no easy answers. Here are some general points to consider when evaluating your decision:
When to Renovate:
- You are emotionally attached to your current location, your neighborhood feeds into a great school district, prime shopping is abundant, there are superior recreational facilities, and you plan on staying in your home for a minimum of 5-7 years.
- Your home value is lower than the homes surrounding you.
- The cost to remodel your home will not surpass the value of homes in the neighborhood.
- Property values are rising or are expected to rise.
- Demand for homes in the neighborhood are high and supply is diminishing.
- You can renovate in phases, which helps with budget constraints and allows you to remain in the home.
- Other homes are being renovated around you.
- You are concerned with the costs of moving, closing fees and possible demolition.
- You are also concerned with increased property taxes and insurance.
When to Build:
- You require a particular floor plan layout that will not work in your present home.
- The excessive cost to renovate your existing home may not be able to be recovered in the event of a future sale.
- You want a larger home with a particular style.
- Unique facilities are required that can’t be accomplished in your present home.
- You have adequate funds and want to live in your present home until your new home is completed.
I firmly believe that home renovation in desirable neighborhoods will be on the rise. This holds true for existing homeowners, first time home buyers, or those upgrading to a new location. If you want to remodel or build a new home it is important to do your homework. Consult with a professional Realtor in order to understand the trend, history, and direction of home values in your neighborhood. Before you purchase a home with the intention of renovating, I also highly recommend consulting with a licensed Architect familiar with the area. Both of these professionals can give you essential information and recommendations to help you with your decision.
~Earl Mark Kaplan, Architect
Note from the Hosts: We would like to thank Earl for sharing some thoughts on a big decision most of us will have to make in a lifetime.
For more essays on the homeownership, please see our category – Essays. For example you might see the essay from Dan Fritschen – Remodel Rather than Move. ~jb