Is 2014 the Right Year to Take the Remodeling Leap?
What's Been Happening To Remodeling Construction Costs
- The economy of the five years before 2008 saw the cost of construction for a home remodel rise by about 10% per year.
- By the end of 2008 the cost of construction had taken a reversal. The slowdown in the local and global economy had lowered the cost of remodeling by 10%-15%.
- A remodel that would have cost $230,000 in 2014 if the recession hadn't occurred actually costs $30,000 less because of reduced construction costs.
- In 2007 if a remodel would have cost $150/SF, today the same remodel would cost $120/SF.
- But the construction price drop looks to be over.
- From January 2010 to April 2014, the construction materials price index has increased at a 2.5% annual rate.
- Given a 2.5% annual increase in construction costs, waiting two years to undertake a $200,000 remodel will increase the cost to $210,125. If inflation rises beyond 2.5% the cost will be significantly greater.
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