The mid-’00s was not only a heyday for real estate speculation and house flipping—it was also prime time for luxurious, over-the-top home renovations. Perfectly functional rooms were gutted for dramatic makeovers, and the hottest trends called for the installation of ostentatious features like outdoor kitchens and home theaters. Lately, though, just as the real estate market has stagnated and become more conservative, homeowners are proceeding cautiously with renovations. Whereas in the past they might have insisted on getting exactly what they wanted, price be damned, today’s home remodelers actually care about value and practicality. Imagine that.
The consensus among home builders and contractors is that, for homeowners today, price matters. Under normal circumstances, such an idea would generate a “Well, Duh!” response. Price always matters, doesn’t it?
Well, in the years leading up to the housing market collapse and the Great Recession, price didn’t seem to be a top concern of home buyers and home revampers alike. The widespread assumption was that homes would just keep increasing in value, so the price one paid today didn’t matter much. It only mattered that the price one would have to pay tomorrow would be more.
What’s become clear over the past five years is that many of the assumptions about the real estate market in the mid-00s were just plain foolish. Many once-popular home renovation projects now seem foolish as well. MarketWatch rounded up some of the home features that were hot not long ago, but that have largely been abandoned by homeowners due to impracticality and/or high cost. The list includes outdoor kitchens, sun rooms, home theaters, and enormous master bathrooms with whirlpool tubs and his-and-her showers.
A survey published earlier this year in Better Homes and Gardens points to an overall shift toward value and function over home features that are clearly splurges, or perhaps even intended mainly to show off. Homeowners, the survey notes, now care more about things like:
• Taking more time to plan home improvement projects
• Shopping around for deals before committing to projects
• The importance of getting the best value out of dollars spent on projects
• The need for rooms with multi-functional space
As for “bonus rooms” with one purpose—home theaters and “media rooms,” as examples—owners have much less interest than they did a few years ago. Today, such rooms seem like a poor use of space, as well as a poor use of money.
USA Today reports that, because of the reluctance of banks to provide home-equity loans and/or the reluctance of homeowners to go (further) into debt over home improvements, more remodelers are only taking on projects that they can pay for in cash. Naturally, such projects tend to be smaller and more bare-bones:
“Everyone is value-oriented,” says Debra Toney of Three Week Kitchens/Baths in a Week, a remodeling firm with offices in Denver and Texas. “They’re just more cautious,” she says, citing their willingness to pick basic appliances rather than Sub-Zero refrigerators and Wolf ranges.
Likewise, experts cited by the Boston Globe say that homeowners are making decisions more carefully, with more thought as to how to get the most value without going overboard:
“Between 2003 and 2008, there was a lot of upper-end activity,” [Harvard University’s Joint Center for Housing Studies senior fellow Kermit] Baker said. “People were doing expensive kitchen projects. What we hear now is that they’re not gutting everything, but picking and choosing aspects to update.”