That headline may sound rough, but it’s the reality. Stephan Sardone of Sardone | McLain broke it down for us recently and offered some sage advice for those of you contemplating a remodel this year.
What don’t people understand about the state of the remodeling industry right now?
Stephan Sardone: We did not just press pause when we went into lockdown. We stopped. The suppliers went home. The workers went home. Multiple businesses associated with just getting lumber to retail outlets like Home Depot faltered. That has resulted in things taking much longer than they used to and price increases across the board.
Homes have appreciated a lot since the start of the pandemic. Does that figure into the remodeling equation?
SS: Homes have appreciated, but it’s not realistic to do a remodel, regardless of equity, and expect to break even when the remodel is finished. You don’t remodel to sell because you won’t get your money back quickly. You remodel to enjoy your home.
Why are people so keen to remodel right now?
SS: All the usual reasons. There is very little real estate available, so people are staying put, and they want their homes to be more accommodating and have better floor plans. They like their neighborhoods, and they are locked into the schools. Even if they can find a house and move, they will still have to remodel, so they are staying put.
What are the biggest misconceptions about remodeling in 2022?
SS: The numbers are so much bigger than people think. They may have made a lot over the past two years, but now they have to spend a lot. However, I don’t advise waiting. It will only get more expensive. If you look at the market, this is a long-overdue correction. Pricing will never go back.
Why is that?
SS: The price of a house is subject to all the things associated with remodeling and the quality of the materials. For the price of materials to come down, the cost of doing business has to come down, machines have to cost less, transportation has to cost less, and people have to be paid less. A hundred factors go into the cost of that 2 x 4 piece of lumber for your remodel. At the end of the day, the price of anything is set by the person selling it.
What’s your best advice for someone determined to remodel their home right now?
SS: Wait until you have multiple projects. It’s not economically feasible to do the smaller projects, so it is much better to consolidate them.
What do you wish people would understand about hiring a contractor to remodel?
SS: The idea that your projects should be a percentage of your home’s value. If your house is $300,000, you are not getting a kitchen remodel for 10 or 15 percent of that figure. The value of your home is not related to the remodel cost.
What should we consider that perhaps we are not?
SS: Money is still very cheap, and interest rates are relatively low, so it’s really all perspective. Things are not going to cost less in six months, and it’s going to be even harder to find a contractor then. Yes, it is expensive but do it right, work with reputable companies like Sardone | McLain and be patient. Get in line!