Home. For many, a home is so much more than just a place to put your stuff. A home represents safety, stability, comfort, and possibly status; for some, it represents one of their most valuable assets. A home is where friends and families gather to share their lives, relive old memories, and create new ones. Today’s changing lifestyles and decorating trends are driving additional needs in our homes like never before. Parents are moving in for care, children remain living at home longer, and remote working can necessitate a home office. As Long Beach housing prices soar (up 8.7% over last year), homeowners are left wondering if it’s better to sell and find a house that meets their evolving needs or remodel their current home.
What Do You Need
Understanding or identifying the problem to solve is the first step when making a big decision, especially one that impacts where you call home. Start by asking why changes are needed. Is it to create more room like a home office or additional bedrooms, modernize spaces, or improve efficiency? The answer for many in the US is to remodel. According to a 2021 DeWalt survey, 52% of the homeowners surveyed plan on renovating instead of buying a new home. For homeowners considering a remodel, here are a few popular remodeling choices to consider:
Kitchen: The average cost of a kitchen remodel in the US is approximately $25,000-$30,000. In Long Beach, it’s more likely to run $55,000 +. However, most homeowners will recoup about 70% of the remodel cost when selling the home.
Bathroom: The average cost of a full bathroom remodel in the US is approximately $14,000-$22,000. In Long Beach, it will be closer to $20,000-$40,000. Most homeowners will recoup about 85% of the remodel costs when selling the home.
Bedroom: The average cost of a bedroom remodel in the US is approximately $4,000-$20,000. In Long Beach, the range will be closer to $12,000-$95,000. Most homeowners will recoup between 50%-75% of the remodel costs when selling the home.
Room Addition: The average room addition cost in the US is approximately $22,500-$74,000. In Long Beach, it will be considerably more. Most homeowners will recoup between 50%-75% of the cost to add a room when selling the home.
It is important to note that each home is unique in style, size, and construction, and the needs and scope for each project will vary greatly. Use the above example numbers only as a guide.
How To Pay For It
The ideal way to fund any project is to pay cash and avoid debt. However, in many cases, the ideal is not an option. The good news is that the housing market in Long Beach is booming, driving housing values higher and higher. As housing values increase, it creates equity for the homeowner. Equity is the difference between the amount owed on the home and what a home is worth. Many banks continue to offer Home Equity Lines of Credit (HELOC) based on the equity in your home. Even with interest rates creeping up over the last few months, they are still lower than the average rates seen in the 1980s and 1990s. When determining how much debt to take on, Investopedia recommends a 28/36 rule, which states, “a household should spend a maximum of 28% of its gross monthly income on total housing expenses and no more than 36% on total debt service.” Avoid taking on more debt than necessary.
Use an Experienced Professional
Using experienced professionals should not be overlooked when deciding to remodel. According to Grisafe Architecture, Inc., hiring an architect is not just one more expense in the remodel process but an investment in the project’s overall success. Architects are accustomed to providing plans to the city for approval, and the plans make it easy to find the right general contractor for the job. After all, it’s your home, the place where family and friends gather and life happens. Don’t stop short when investing in one of your most valuable assets; use experienced professionals.