Why Homeowners should capitalize on this economy and Remodel Right Now - By Erin McHale
As the dreary comments about the state of our economy proliferate through the media, consumers can’t help but feel a need to stop any extra spending. But are consumers really educated about when the best time to buy is?
One example to consider is remodeling, which can have a high price tag. Consumers who have been planning to remodel are probably skeptical about spending and may assume that waiting until the economic state gets better is the best approach. However, there are many factors that people fail to consider, especially when spending a significant sum of money. In fact, one could argue that right now is actually the best time to remodel. Basic economics suggests that products and services are going to increase in price once the economy becomes more stable due to inflation, exchange rates, and the rules of supply and demand.
The government is printing unprecedented amounts of money right now for the stimulus packages which are causing the country’s money supply to grow at a much faster rate than the state of the economy. There is little doubt that this extreme production of money will create inflation later. So why wait until later and pay more money for the same amount of materials and labor to remodel your home?
The fluctuation of exchange rates also largely affects the price of goods. A significant amount of materials and products used to remodel a home are imported, especially from China. China’s Yuan is speculated to appreciate which will cause the exchange rate number to increase. As such, Americans will presumably be paying more money for the same amount of goods.
The laws of supply and demand also indicate that the cost of remodeling will be significantly greater once the economy has turned around. Due to low consumer confidence, the demand for any product or service right now is lower than it was in the past. It is safe to say that supply greatly outweighs demand at this time. Due to this, products and services are priced lower in an attempt to balance the scale. Once the economy starts flourishing again, prices will be raised and consumers will be paying more for the same products and services that they could purchase now for a smaller cost.
“Right now is actually the best time to buy products to remodel. Many colleagues within this industry have discussed the problem of having too much inventory on hand. Everyone is motivated to get rid of the backed up inventory, which is leading to major price cuts,” said Sean Lin, CEO of Mei Kitchens, a leading online retailer of kitchen cabinets.
It's not only the products that are being offered for lower prices, but the service as well. During an interview with Michael Jones, a kitchen remodeling industry insider and co-author of The Idiot’s Guide to Kitchen Remodeling, he said, “Consumers should capitalize on the cost of labor at this time. Many contractors are experiencing a slow down in business and may be willing to decrease their labor costs just to keep a steady work flow. I’ve also noticed that only the quality contractors are able to survive in this economy. Consumers have a much better chance of getting a reputable and experienced contractor now compared to when things start to pick up again.”
We are experiencing a buyer’s market and those in the market for remodeling should capitalize on the benefits which can be garnered at this time. For optimal savings, consumers should research purchasing materials from a direct manufacturer. Buying direct, particularly from online retailers, will often decrease costs by more than 50%. Consumers should consider these factors when making the decision as to whether to remodel now or remodel later.