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Carla Fried: Planning to age in place? A recession can be a good time to remodel

Carla Fried, Rate.com on

Published in Home and Consumer News

If you've done the hard number-crunching and are confident you can afford to stay put in retirement, your home likely needs a few tweaks to make it safer for an older you.

If your household finances are not under stress due to the economic fallout of the coronavirus crisis, now can be a smart time to start tackling age-in-place renovation projects.

A slowdown in the remodeling boom means contractors and architects are likely more motivated to return phone calls. For the past few years, spending on remodeling grew at nearly triple the rate of inflation. The Joint Center for Housing Studies at Harvard recently issued a "downside" update to its remodeling forecast that projects spending growth will turn negative into early next year due to the economic impact of the coronavirus.

A slowdown in business should make contractors more willing to negotiate price, and timing may be more flexible, as their backlog and waitlist on projects may have already shrunk.

Material costs are also lower. The National Association of Home Builders reported a record 4.1% decline in material costs in April. The -5.4% year-to-date decline eclipses the previous record slide of -1.3% in 2009.

Appliance costs should also decline amid reduced consumer demand.

 

And though some banks are making it harder -- if not impossible -- to qualify for a home equity line or loan, there are still lenders out there (hint: Check out credit unions) willing to make deals with qualified borrowers. If you have $400,000 in equity and are looking to borrow 10% or so of that to polish off an age-in-place project, you could get a more receptive greeting than if you have $100,000 in equity and want to borrow more than half of that.

Here's how to create a sensible age-in-place renovation game plan:

--Focus on needs, not aspirations. Sure, aesthetics matter, but so too does cost. Reworking the bathroom so there is a level-in shower that won't require an older you to climb over a bathtub rim is a valuable age-in-place project. But it's on you to decide if you're going to spend $20,000 for the bathroom you need or $40,000 for the HGTV-ready bathroom you want.

And keep reminding yourself that every dollar you spend will never be fully recouped by you, or your heirs. A quick web search of "remodeling cost vs. value" will land you at sites that show the typical payback can range from 65% to 75% for many projects, such as a kitchen or bathroom remodel.

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