The State of Home Construction Prices
Competition is heating up in the construction business. Photo Credit: hashmil
Money is tight for homeowners around the country, as evidenced by a predicted 12% drop in home improvement spending in 2009. Despite a small increase in single-family home construction in the last month, the market as a whole is still down, although close to bottoming out, experts say.
Coupled with falling work flow, however, are falling prices and increased competition; thus changing the state of home construction prices. Competition between builders — to the point of door-to-door solicitation — has spawned a fall in remodeling costs. Homeowners are claiming costs up to 30% cheaper than just a few years ago. One contractor, from Maryland, told USA Today that average costs were down 15% from two years ago.
These drops in prices are working to keep the industry afloat. While homeowner are tight on money themselves, those with good credit or some cash on hand see a wise investment in smaller, more specific projects such as countertops, refaced cabinets, or new tile floors. Such projects can change the feel of the home without the cost of an expensive transformation, but at a much lower cost than previously available.
In terms of new home construction, prices may be down, but the high cost combined with reluctant lenders and demand for cheaper foreclosed homes has stalled many new projects.
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