With unemployment rate soared to 13% and business closures continue to increase, Coronavirus has made quite an impact on the economy across Canada.
As the economy weakens, we’re all expecting a recession to follow.
So, where does that leave you and your renovation plans?
- Is it a good idea to make home improvements during a recession or should you wait?
- Should you remodel or renovate your home?
- Are you likely to get a better deal now or should you wait until the economy recovers?
Well, providing you have the cash flow available, there are some definite upsides to a downturn in the economy when it comes to renovating your home.
What happens to prices in a recession?
During a downturn in the economy, house prices usually fall due to the uncertainty.
In actual fact though, house prices in Calgary have been dropping since 2017, with the market sluggish well before the pandemic arrived.
There has been an almost 10-percent decline in March sales compared to last year and home sales are tracking at 24 percent below the five-year average.
So, there were signs of recession even before the pandemic. The past couple of months have simply rammed this message home.
But is it time to “stick” or “twist” with your home?
Why renovate?
While there is a temptation to resist spending money during times of uncertainty, now could be the ideal time to renovate.
Here are five good reasons why:
1. You might be spending more time at home
Opportunities to travel in the near future look slim. Those tropical vacations may have to wait a couple of years.
The money you save could be put towards some long-overdue home improvements.
Who’s to say there won’t be a second wave and another lockdown?
Get your house ready for another extended period at home: add a bathroom or family room or extend your kitchen – it could make a huge difference to home life.
2. Competitive pricing during a recession
With lower demand for real estate, we typically see a higher demand for home renovations during an economic downturn.
Instead of making the moves to bigger homes, it is a great time for homeowners to work on improvements to their existing homes.
This means that contractors will be readily available to get to work and offer homeowners competitive pricing for their home improvement projects.
3. Availability of high-quality contractors
It is more important than ever to do your research to find the right contractors for your price range and preferred timescale.
As competition rises, high-quality contractors will stand out with their raving online reviews and qualifications.
Create a home renovation checklist to ask the renovation to make sure you are well-prepared before making the decisions.
A trustworthy contractor will work for you to find the best materials at the most reasonable price.
4. You can reduce energy costs
Replacing old windows, doors and appliances can make your home more energy-efficient and reduce energy bills.
With the lower prices for these items, you may be able to save both in the upfront renovation costs and in the ongoing monthly bills you pay (which will help to offset the costs of the project).
You will also reduce your carbon footprint.
5. You can take advantage of the weather
Homeowners have a short ‘window’ now when we should be expecting better weather for a few months. It’s a shame to waste it due to a recession.
Until September or October, take advantage of the milder weather to make those home improvements before the Calgary winter is upon us again!
Renovating to sell
If you’re renovating to sell, it’s good to know that homes in Calgary are still selling.
According to a Chamberlain Real Estate Group report on the Calgary real estate market, 53.6 percent of homes listed in the city have sold in the past three months.
However, another recent study by Joe Samson suggests that home sales in Calgary in April 2020 were 5.8 percent down from March 2020.
So, what has changed during the recent lockdown?
Firstly, people are still looking for houses but they are having to look in different ways and it’s become more competitive for sellers.
All open houses were cancelled by the Alberta Real Estate Association from March 26th, about two weeks after the World Health Organization declared the pandemic.
While there had already been a growing trend to search and view online before the COVID-19 lockdown, that trend has gone through the roof in the past couple of months.
Virtual tours are available for most homes with reputable real estate agents. Some people are even using Facebook Live.
Since potential buyers cannot physically visit houses, they require more visual proof via virtual tours and upfront proof of renovations work in order to seriously consider buying a home.
That means your renovation work will pay dividends with serious buyers, as your home will look more visually appealing on the virtual tour, helping it to stand out from the competition.
Which renovations can you consider right now?
Some homeowners will have experienced different scenarios during the lockdown that convinced them of the need to renovate.
Here are a few ideas to emerge from families we’ve spoken to:
A home office addition
Those working from home may have found it difficult to be productive with the children around.
An obvious solution is a home office addition – either converting an existing room or adding a room over the garage.
You could even consider adding a separate detached space to your property that you can rent it out as office space when you’re not using it.
A new kitchen
With the whole family eating at home again, it’s been just like the good old days for many!
The kitchen is not just a space for eating but for discussing the day’s events, swapping stories and opinions. But when everyone’s at home, things can also get congested.
A redesigned kitchen can not only upgrade appliances and lighting but make the whole area more space-friendly.
Basement developments
Maybe it started with a spring clean with the family. You decided to tidy up some areas and create space in the basement. Then you got thinking about how you can really use that space effectively.
Basement development is a great idea – whether it’s adding a games room, a family room, an extra bedroom, or some other idea sparked by the family all being at home together.
Need renovations advice?
Talk to us. The Litwiller team can help advise on the renovations that make sense for your home during this recession.
