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If you’ve heard it once during the COVID-19 outbreak, you’ve heard it 100 times, “Now is the time to buy!” or “Interest rates are at an all-time low!” These statements can make it easy to want to drop a “for sale” sign in the front yard and frantically browse Zillow. Sure, a lower interest rate is appealing. After all, who wouldn’t want to pay less and get more?
The lower interest rates were an incentive to support the economy in the second quarter of 2020. While the incentive kept the housing market moving, the GDP dropped 32.9% in the second quarter of 2020, the worst drop on record, officially putting the United States in a recession. It’s not uncommon for mortgage rates to be lower during an economic recession, but how much lower they will go from already record lows remains to be seen.
While lower prices, competitive interest rates, and a very healthy housing market are appealing, you need to be sure you’re making the right long-term decision for you and your family. If there is not an urgent need to make a change to your square footage, you might be better suited to do a renovation. Let’s talk through some of the benefits and drawbacks of renovating versus relocating.
Home renovations come in all shapes and sizes. Every household has different needs and varying budgets. As you compare and contrast the idea of renovation or selling, make a list of the things you wish you had in your current home. As you create your list, make note of which items are a priority.
If your list consists primarily of cosmetic, small changes, a renovation is likely the better option. This could include bathroom updates, painting living spaces or kitchen cabinetry, changing doors, improving lighting fixtures, and more. Perhaps you need to flip a bedroom or living area into a home office. Decide what changes would make your current living condition more attractive and usable for you and your family.
You’ve moved before. Remember how much of a headache it can be? Decide if the payoff of moving would be worth the effort. Not only the packing but the need to sell your current home can add stress to an already high-stakes situation.
Many Iowans are working from home as businesses maneuver the coronavirus pandemic. You may feel cramped for space with the kids at home or working from the kitchen table. A renovation could add to the claustrophobic situation. Keep the construction timeline in mind – you may need to find alternative work-from-home arrangements.
If it’s not the right time to relocate, you can be assured that a home remodeling project will add value to your property. Increasing the value of your home while making it more livable in the present is a win-win.
If the list you create has a primary focus on needing more space – bedrooms, living areas, garage space, storage, and more, it could be time to seriously consider moving. Room additions, basement finishes, and layout modifications are all possible with a home renovation. However, these larger-scale projects can come with a big price tag. In such cases, weighing the financial implications of moving versus renovating can help you make the best choice.
Buying a home with a blueprint that meets your needs is likely a more straightforward process than forcing a remodel to meet your needs. If your current property won’t allow for a smooth renovation process, it’s a great time to get on the phone with a real estate agent.
If the stars align for you to buy a home and relocate, now is the time. Locking in a lower interest rate, selling your current home, and getting a new property that meets your list of needs is a perfect scenario.
There is a lot to consider in the process of remodeling your home or starting the house hunt. A good starting point is to gather quotes for the renovations you’d like to see for your home. Gathering financial information will help you understand what is in the realm of possibility for your budget and living needs. Premier construction has over 15 years of experience in helping Iowans fall in love with the space they call home. Contact us today with any questions or to get started with a quote.