A common comment we have been hearing from buyers – “rates are going up…so I am waiting for home prices to come down”. So far over the first quarter of 2018 we haven’t seen these hopes come to fruition. Rather, both interest rates and home prices have continued to inch their way up. Mortgage rates are projected to continue to rise over the remainder of the year, possibly to 5.5%. While still relatively low, a rate of 5.5% versus today’s average rate of 4.5% significantly impacts purchasing power – whether home prices fall or not. This chart shows how much your payment increases as interest rates increase – and how much prices must drop if you are hoping that the drop in price will compensate for the raise in rates. In short, your first consideration should be rates – not holding out for a lower home price that may not come, as rates continue to rise. Take advantage of still low rates while you are able to; don’t miss out on additional purchasing power! If you have any questions please do not hesitate to contact us at anytime!
You’ve most likely heard the rule: Save for a 20-percent down payment before you buy a home. The logic behind saving 20 percent is solid, as it shows that you have the financial discipline and stability to save for a long-term goal. It also helps you get favorable rates from lenders.
But there can actually be financial benefits to putting down a small down payment—as low as three percent—rather than parting with so much cash up front, even if you have the money available.
The downsides of a small down payment are pretty well known. You’ll have to pay Private Mortgage Insurance for years, and the lower your down payment, the more you’ll pay. You’ll also be offered a lesser loan amount than borrowers who have a 20-percent down payment, which will eliminate some homes from your search.
The national average for home appreciation is about five percent. The appreciation is independent from your home payment, so whether you put down 20 percent or three percent, the increase in equity is the same. If you’re looking at your home as an investment, putting down a smaller amount can lead to a higher return on investment, while also leaving more of your savings free for home repairs, upgrades, or other investment opportunities.
THE HAPPY MEDIUM
Of course, your home payment options aren’t binary. Most borrowers can find some common ground between the security of a traditional 20 percent and an investment-focused, small down payment. Your trusted real estate professional can provide some answers as you explore your financing options.
Moving into a new home is an exciting time, and you’re probably daydreaming about decor and paint schemes and new furniture. But before you get into the fun stuff, there are some basics you should cover first.
Change the locks
Even if you’re promised that new locks have been installed in your home, you can never be too careful. It’s worth the money to have the peace of mind that comes with knowing that no one else has the keys to your home. Changing the locks can be a DIY project, or you can call in a locksmith for a little extra money.
Steam clean the carpets
It’s good to get a fresh start with your floors before you start decorating. The previous owners may have had pets, young children, or just some plain old clumsiness. Take the time to steam clean the carpets so that your floors are free of stains and allergens. It’s pretty easy and affordable to rent a steam cleaner—your local grocery store may have them available.
Call an exterminator
Prior to move-in, you probably haven’t spent enough time in the house to get a view of any pests that may be lurking. Call an exterminator to take care of any mice, insects, and other critters that may be hiding in your home.
Clean out the kitchen
If the previous occupants wanted to skip on some of their cleaning duties when they moved out, the kitchen is where they probably cut corners. Wipe down the inside of cabinets, clean out the refrigerator, clean the oven, and clean in the nooks and crannies underneath the appliances.
Come and tour this tranquil and peaceful home in Gavilan Springs Ranch! This beautiful, turnkey home is situated on almost 2 acres of useable land. It is a country charmer with outdoor recreational opportunities of biking, walking and quiet equestrian trails. This elegant single story home has 4 large bedrooms, 2 full baths and encompasses over 2,200 square feet of living space with serene views in a well established neighborhood, 1 of only 2 streets with NO MELLO-ROOS! A sprawling ranch style home featuring hardwood floors, crown molding, custom plantation shutters, built-ins, a cozy wood burning fireplace, central a/c and heating, indoor laundry room, master suite with a huge walk in closet, large bedrooms, formal dining and living rooms, attached 3 car garage with automatic roll up doors, garage has workspace and cabinets, automatic security gate, spacious RV and Boat parking, 3 dog kennels and a huge dog run, fruit trees, and much, much more. This home is priced to sell! Schedule a private tour today!
Click the link below for a photo tour!
Don’t love your popcorn ceiling? You’re not the only one stuck with some unwanted stucco overhead. There are many options for moving on from it, but not all of them are equally effective — or equally easy. To help you decide how to address your popcorn problem, here are some top ways to remove, cover or distract from stucco ceilings.
Related: How to Decorate Your Ceiling
Popcorn Ceiling 1: The Kitchen Source, original photo on Houzz
From the 1950s to the 1980s, so-called popcorn ceilings (with their prickly stucco texture resembling the popular movie theater snack) were a major architectural staple in America and many other nations.
Eventually the asbestos commonly used in the application was found to be toxic, and demand severely dropped.
However, a textured ceiling does have its advantages. It reduces echoes and hides ceiling plane imperfections, which is why it’s still used (in asbestos-free formulations) today, as shown in the bathroom here.
Despite its practical uses, popcorn ceilings, for many people, are considered an unfashionable eyesore, especially with contemporary demand for “clean lines.” Also, popcorn ceilings can gather dust and be difficult to clean or repaint, which means they don’t always age beautifully.
But don’t worry. You’ve got plenty of options.
Popcorn Ceiling 2: Designs by Gia Interior Design, original photo on Houzz
The good news is a sprayed-on stucco coating can be scraped off to reveal the original ceiling surface, a process usually known simply as “ceiling scraping” or “stucco removal.” A specialist typically does this because (here’s the bad news) the process can be somewhat costly at around $1 to $2 per square foot. It’s a messy, labor-intensive process, hence the high cost.
Also, in some cases, the results may not achieve the crispness of a ceiling that had not been stuccoed in the first place, especially if the stucco has been painted over, which greatly complicates the removal process.
Even in the best cases the exposed ceiling will typically require at least some smoothing and patching to create a more even and crisp final product, which makes this an extensive and relatively challenging undertaking for DIYers.
While ceiling stucco no longer uses asbestos in modern applications, homes built before 1980 (or even in the early ’80s while old stucco products were still stocked) may include asbestos. If there is any doubt, a professional asbestos test should be conducted before any resurfacing, which could release heavily toxic dust.
One of the simplest alternatives to scraping is removing and replacing the ceiling drywall. Alternately, you can have the ceiling layered over with new drywall. The drop in the ceiling plane will often be minimal, and this method can encase asbestos rather than releasing it into the air, delaying the issue, if not resolving it.
Redrywalling a ceiling will cost closer to $4 to $6 per square foot, but the results will be more predictable.
Popcorn Ceiling 3: Diament Builders, original photo on Houzz
Speaking of layering, there are many other materials besides drywall that can be installed over a popcorn ceiling, many of which add extra personality to a room.
Related: Keep Your Cottage Cool
Beadboard. Classic beadboard makes a charming ceiling treatment, and not just in a rustic cottage. Painted white, the subtle texture of beadboard paneling works well in traditional spaces or modern ones, adding a layer of depth in an unconventional place.
Popcorn Ceiling 4: Spinnaker Development, original photo on Houzz
Panels of beadboard often cost less than 50 cents per square foot, making this a very affordable option, especially for handy DIYers.
For a contemporary twist, try finishing the ceiling in a gloss paint, as shown here. This slow-drying finish will take more labor to complete, but the results have incredible depth and elegance.
Warm wood. If you’re not into painted beadboard, try multitonal wood for a rich, inviting treatment that’s great for a den or sitting area. Contrast it with white molding and crossbeams, or let the wood speak for itself. This approach works well with rustic decor, as a gentle touch in a modernist space or somewhere in between.
Popcorn Ceiling 5: Bravehart Design Build, original photo on Houzz
Pressed tin. Whether you use true pressed tin tiles or a fiber substitute, this classic ceiling look recalls speak-easy style and makes a great cover-up for a kitchen ceiling. You can paint it white or pale gray to keep the look breezy, or an inky dark hue (like charcoal or navy) for moody atmosphere. Or choose a metallic finish for extra sheen and drama.
Many companies now provide faux pressed tin and other panel systems specifically designed to cover stuccoed or damaged ceilings. They typically cost $1 to $5 per square foot.
To have a professional install these materials for you, expect to pay several hundred dollars extra.
Popcorn Ceiling 6: The Morson Collection, original photo on Houzz
Lighting. Sometimes the best way to deal with ceiling stucco is to de-emphasize it, and <a href=‘http://www.houzz.com/photos/ceiling-lighting’>smart lighting choices</a> can go a long way toward that.
Notice how the lighting hitting this stucco wall emphasizes the texture. Great when the effect is desired. To avoid highlighting unwanted ceiling stucco, choose lights that aim downward, rather than upward or outward, so light is cast on beautiful surfaces below and not on your ceiling itself.
Try pot lights, or semi-flush-mounts (or pendants) with an opaque shade to aim light downward rather than multiple directions.
Paint. Ultimately, the best way to deal with a popcorn ceiling may simply be to learn to live with it. Think about it: How many people do you know who live with popcorn ceilings? I bet you can’t specifically remember who has it or doesn’t, because unless a ceiling is highlighted, we don’t typically spend much time looking at it.
Try painting the walls and the ceiling the same color to blur the lines between them, and then create drama at ground level to draw the eye down. You’ll soon forget about your stucco altogether.
The American people have spoken and they have elected Donald J. Trump as the 45th president of the United States. Change was clearly demanded, and change is what we will have.
The election was a shock for many, especially on the West Coast where we have not been overly affected by the long-term loss in US manufacturing or stagnant wage growth of the past decade. But the votes are in and a new era is ahead of us. So, what does this mean for the housing market?
First and foremost I would say that we should all take a deep breath. In a similar fashion to the UK’s “Brexit”, there will be a “whiplash” effect, as was seen in overnight trading across the globe. However, at least in the US, equity markets have calmed as they start to take a closer look at what a Trump presidency will mean.
On a macro level, I would start by stating that political rhetoric and hyperbole do not necessarily translate into policy. That is the most important message that I want to get across. I consider it highly unlikely that many of the statements regarding trade protectionism will actually go into effect. It will be very important for President Trump to tone down his platform on renegotiating trade agreements and imposing tariffs on China. I also deem it highly unlikely that a 1,000-mile wall will actually get built.
It is crucial that some of the more inflammatory statements that President-Elect Trump has made be toned down or markets will react negatively. However, what is of greater concern to me is that neither candidate really approached questions regarding housing with any granularity. There was little-to-no-discussion regarding housing finance reform, so I will be watching this topic very closely over the coming months.
As far as the housing market is concerned, it is really too early to make any definitive comment. That said, Trump ran on a platform of deregulation and this could actually bode well for real estate. It might allow banks the freedom to lend more, which in turn, could further energize the market as more buyers may qualify for home loans.
Concerns over rising interest rates may also be overstated. As history tells us, during times of uncertainty we tend to put more money into bonds. If this holds true, then we may see a longer-than-expected period of below-average rates. Today’s uptick in bond yields is likely just temporary.
Proposed infrastructure spending could boost employment and wages, which again, would be a positive for housing markets. Furthermore, easing land use regulations has the potential to begin addressing the problem of housing affordability across many of our nation’s housing markets – specifically on the West Coast.
Economies do not like uncertainty. In the near-term we may see a temporary lull in the US economy, as well as the housing market, as we analyze what a Trump presidency really means. But at the present time, I do not see any substantive cause for panic in the housing sector.
We are a resilient nation, and as long as we continue to have checks-and balances, I have confidence that we will endure any period of uncertainty and come out stronger.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.
Over the past 12 months (through August 2016), the markets covered by this report added 273,200 new jobs and the total number of people claiming unemployment insurance dropped by over 100,000. With these shifts toward full employment, the area’s unemployment rate dropped from 6.2% to 5.1% during the past year. Some might note that unemployment was only 4.3% in second quarter and wonder why the rate has increased; however, the reason for this is that there was a substantial increase in the civilian labor force which rose by over 200,000 people.
HOME SALES ACTIVITY
- There were a total of 52,550 home sales in third quarter of 2016. This was 0.6% lower than the same period in 2015, and 3.1% lower than seen in the second quarter of this year.
- The drop in sales is likely a result of inventory levels which remain well below historic averages. It’s worth noting that, while the number of listings in the third quarter was 4.2% lower than the same quarter a year ago, it increased by 5.9% relative to the second quarter of this year.
- Home sales continue to be a mixed bag with transactions higher in Riverside and San Bernardino Counties, but lower in L.A., Orange, and San Diego Counties.
- Even with the recent increase in listings, we are still well below where we need to be for the market to be considered balanced.
- When compared to third quarter of 2015, average prices in the region rose by 5.8% and are a modest 0.1% higher than seen in the second quarter of 2016.
- When compared to second quarter, San Diego, Riverside, and Los Angeles Counties all saw average home prices decline. While they are all up year-over-year, we may be seeing a small shift in the market in which price growth is expected to slow.
- Riverside County saw the greatest appreciation in home values (+8.0%). This was followed by Los Angeles County, where the average price rose 6.7%.
- Pending sales were up across the board, and it will be interesting to see what effect this jump may have on home prices in the fourth quarter.
DAYS ON MARKET
- The average time it took to sell a home in the region was 55 days. This is a drop of 3 days when compared to the third quarter of 2015.
- The drop in days on market is starting to slow. With the jump in new listings that I described earlier, we may see days on market start to rise as we enter the winter months.
- Homes in San Diego County continue to sell at a faster rate than the other markets in the region. In the third quarter, it took an average of 30 days to sell a home there, which is four days less than seen a year ago.
- All five counties saw a drop in the amount of time it took to sell a home between the third quarter of 2015 and the third quarter of 2016.
The speedometer reflects the state of the region’s housing market using housing inventory, price gains, sales velocities, interest rates and larger economics factors. The regional economy continues to add jobs and this continues to increase the demand for housing.
That said, price points in some markets are approaching pre-bubble levels and, without sufficient income growth, housing affordability will become an issue. I remain hopeful that additional housing inventory will address this pent-up demand, causing prices to appreciate at more modest rates.
I’ve left the speedometer unchanged from last quarter. Intuitively, I think the market may be headed back to being more balanced, but I want to see a few more quarters of moderating home prices and greater choice for buyers before I make that call.
Matthew Gardner is the Chief Economist for Windermere Real Estate, specializing in residential market analysis, commercial/industrial market analysis, financial analysis, and land use and regional economics. He is the former Principal of Gardner Economics, and has over 25 years of professional experience both in the U.S. and U.K.
There are a number of things that can trigger the decision to remodel or move to a new home. Perhaps you have outgrown your current space, you might be tired of struggling with ancient plumbing or wiring systems, or maybe your home just feels out of date. The question is: Should you stay or should you go? Choosing whether to remodel or move involves looking at a number of factors. Here are some things to consider when making your decision.
Five reasons to move:
1. Your current location just isn’t working.
Unruly neighbors, a miserable commute, or a less-than-desirable school district—these are factors you cannot change. If your current location is detracting from your overall quality of life, it’s time to consider moving. If you’re just ready for a change, that’s a good reason, too. Some people are simply tired of their old homes and want to move on.
2. Your home is already one of the nicest in the neighborhood.
Regardless of the improvements you might make, location largely limits the amount of money you can get for your home when you sell. A general rule of thumb for remodeling is to make sure that you don’t over-improve your home for the neighborhood. If your property is already the most valuable house on the block, additional upgrades usually won’t pay off in return on investment at selling time.
3. There is a good chance you will move soon anyway.
If your likelihood of moving in the next two years is high, remodeling probably isn’t your best choice. There’s no reason to go through the hassle and expense of remodeling and not be able to enjoy it. It may be better to move now to get the house you want.
4. You need to make too many improvements to meet your needs.
This is particularly an issue with growing families. What was cozy for a young couple may be totally inadequate when you add small children. Increasing the space to make your home workable may cost more than moving to another house. In addition, lot size, building codes, and neighborhood covenants may restrict what you can do. Once you’ve outlined the remodeling upgrades that you’d like, a real estate agent can help you determine what kind of home you could buy for the same investment.
5. You don’t like remodeling.
Remodeling is disruptive. It may be the inconvenience of loosing the use of a bathroom for a week, or it can mean moving out altogether for a couple of months. Remodeling also requires making a lot of decisions. You have to be able to visualize new walls and floor plans, decide how large you want windows to be, and where to situate doors. Then there is choosing from hundreds of flooring, countertop, and fixture options. Some people love this. If you’re not one of them, it is probably easier to buy a house that has the features you want already in place.
Five reasons to remodel:
1. You love your neighborhood.
You can walk to the park, you have lots of close friends nearby, and the guy at the espresso stand knows you by name. There are features of a neighborhood, whether it’s tree-lined streets or annual community celebrations, that you just can’t re-create somewhere else. If you love where you live, that’s a good reason to stay.
2. You like your current home’s floor plan.
The general layout of your home either works for you or it doesn’t. If you enjoy the configuration and overall feeling of your current home, there’s a good chance it can be turned into a dream home. The combination of special features you really value, such as morning sun or a special view, may be hard to replicate in a new home.
3. You’ve got a great yard.
Yards in older neighborhoods often have features you cannot find in newer developments, including large lots, mature trees, and established landscaping. Even if you find a new home with a large lot, it takes considerable time and expense to create a fully landscaped yard.
4. You can get exactly the home you want.
Remodeling allows you to create a home tailored exactly to your lifestyle. You have control over the look and feel of everything, from the color of the walls to the finish on the cabinets. Consider also that most people who buy a new home spend up to 30 percent of the value of their new house fixing it up the way they want.
5. It may make better financial sense.
In some cases, remodeling might be cheaper than selling. A contractor can give you an estimate of what it would cost to make the improvements you’re considering. A real estate agent can give you prices of comparable homes with those same features. But remember that while remodeling projects add to the value of your home, most don’t fully recover their costs when you sell.
Remodel or move checklist:
Here are some questions to ask when deciding whether to move or remodel.
1. How much money can you afford to spend?
2. How long do you plan to live in your current home?
3. How do you feel about your current location?
4. Do you like the general floor plan of your current house?
5. Will the remodeling you’re considering offer a good return on investment?
6. Can you get more house for the money in another location that you like?
7. Are you willing to live in your house during a remodeling project?
8. If not, do you have the resources to live elsewhere while you’re remodeling?
If you have questions about whether remodeling or selling is a wise investment, call us! We are happy to help!
Thinking about buying your first home, or perhaps upgrading from your current place? Thanks to the current economic climate and game-changing technology in the housing market, now is the perfect time to take the plunge. Low interest rates Lenders are giving buyers mortgage rates that are extremely enticing—you can get a mortgage below 4.0%. There’s a good chance these are the lowest mortgage rates we’ll see in a long time, which means affordability is at a high. Prices are on their way up Mortgage rates may be low, but housing prices are getting higher and higher because of demand—prices increased 5.1% year-over-year in November 2015. If you’re thinking about buying, delaying a few years could lead to a higher purchase price, or getting less home for your money. A great job market The United States added 2.65 million jobs in the last year. There’s increasing job security and available work, leading to high consumer confidence. Technology makes buying simpler and less expensive Along with listing websites like Zillow and Trulia, there are an increasing number of websites and apps that simplify the process, make it easier to shop around for homes and mortgages, and save you money. Cheap fuel Lower gas and energy prices mean more money in your pocket and more purchasing power. The money you’re not putting into your gas tank or toward your utilities can instead go toward saving for a down payment or affording a bigger monthly mortgage payment.
8 Ways Your Kitchen Renovations Could Break Your Budget
When you begin planning a kitchen renovation project, you may have no idea how much your ideal vision might cost. The answer will likely depend on several factors, including the size of your space, what you will do to it, and your budget. In the end, the price of a renovation should largely be driven by your own choices.
That said, there are some common reasons kitchen renovations go over the original budget. We asked three kitchen designersto tell us what they most commonly see.
Kitchen Reno 1: Original chart on Houzz
The No. 1 reason that renovation projects (all projects, not just kitchens) go over budget is owners choosing more upscale products and finishes, according to a recent survey of 120,000 registered Houzz users, including 70,000 who renovated in 2015. Nearly half of those who went over their budget cited this as a reason.
About 40 percent of those who busted their budgets said finding out that products or services were more expensive than anticipated was the culprit, according to the survey. Given that this was a such common experience, we’d like to flag some areas where costs can rack up quickly.
Kitchen Reno 2: Santarossa Mosaic & Tile Co Inc, original photo on Houzz
1. Custom cabinetry. Cabinet costs range widely, largely depending on whether they come from a big-box store or are semi-custom or custom-made. Stock cabinets typically cost $50 per linear foot, while custom cabinetry can run up to $2,000 per linear foot.
The key is to know how much the designs you want might cost before you actually start to renovate. Keep in mind that specialty and custom items usually cost more. For example, it may look beautiful to stretch your upper cabinets to 12 feet to balance out high ceilings. But with this design, “you’ve almost quadrupled the cost because your standard cabinet doesn’t go to 12 feet. Now you’re doing super-custom cabinets,” says Tanner Luster, owner of Luster Custom Homes & Remodeling in Scottsdale, Arizona. Ask your architect, designer or general contractor to advise you on the costs of various options early. If you’re acting as your own general contractor and hiring individual tradespeople directly, you can discuss cost upfront with them before you finalize your plan.
2. Special features. In addition to the external features of cabinets, the innards can increase the cost. Examples of nice-to-have but pricey cabinetry add-ons include a magic corner, where pullout shelves provide access to a hidden portion of a cabinet that you otherwise couldn’t reach, a knife drawer, or spice or wine racks. “There are so many things you can add to cabinetry. You can add $10,000 or $15,000,” says Matthew Ferrarini of Ferrarini Kitchens, Baths & Interiors in Philadelphia. “Before you know it, your cabinetry costs significantly higher than you want.”
Before committing to a special feature, you may want to consider how much you’ll really use it. That way, you can determine if the added functionality is worth the cost to you.
Kitchen Reno 3: Echelon Custom Homes, original photo on Houzz
3. Countertops. The cost for countertops ranges widely. Plastic laminate countertops are relatively affordable at $8 to $20 per square foot. Quartz and granite typically run much higher, anywhere from $50 to $120 per square foot. “If you haven’t purchased a countertop in 20 years and you go from a laminate to a Cambria or a quartz or a granite,” be sure you look into the cost of the various options, advises Judy Kimble, marketing manager at Gerhard’s Kitchen & Bath Store in Madison, Wisconsin.
4. Appliances. Appliances also range widely in cost, from under $1,000 to several thousand, depending on the make, model and features. Luxury appliances like Wolf and Sub-Zero are priced on the higher end of the range, and brands like GE are more budget. A Sub-Zero refrigerator could cost upward of $7,500, while a basic GE model from Sears could cost under $500. A Miele gas range could run $7,000, and a premium 60-inch model from La Cornue more than twice that. An Asko dishwashercould cost more than $1,000, whereas some LG models sell at just $450.
These prices are examples and not meant to be all-encompassing; the point is that appliances have a huge range. “A Viking range versus a GE Profile could be a $10,000 to $15,000 difference,” Ferrarini says. Kimble, the Wisconsin kitchen store manager who appreciates luxury appliances, says she was once quoted $38,000 for an entire kitchen suite. Do your research and find out what you get for the various cost ranges so that you can determine if the price of the features is worth the expense for your family.
Kitchen Reno 4: Before Photo, original photo on Houzz
Hidden Costs That Can’t Be Avoided
Beyond the costs that the owner controls by selecting finishes and materials are the costs resulting from structural problems that simply must be resolved.
5. Unforeseen structural issues. You might open a wall and find that termites have eaten half the studs. Perhaps once the kitchen flooring is removed, you find that an undetected water leak has rotted the subfloor and floor joists. Or, as shown in this picture from a real Houzzer’s kitchen renovation project, you might discover a faulty ceiling. “Our only unexpected expense was when the kitchen ceiling partially collapsed while our contractor was cutting holes for the can lights,” writes Houzzer Susan Hofer. “Bought the house new 37 years ago and the collapse exposed some very poor construction.”
Such unforeseen issues are good incentives to do pre-project due diligence. Even so, not every problem can be caught ahead of time. Many designers recommend reserving a 20 percent contingency in your kitchen renovation budget for unexpected surprises.
6. Code compliance. Pete Gersdorf, owner of Aim Kitchen and Bath in Des Moines, Iowa, has faced code issues on some kitchen remodels. For example, when a new gas range is a high-BTU unit, a larger gas pipe may need to be installed — which entails opening up the wall and replacing the pipe. He has seen plumbing vent issues when the original sink plumbing was not correctly installed. “We [have] also found ceiling joists or floor joists not built correctly and had to replace them to meet current standards and or codes,” Gersdorf says.
Kitchen Reno 5: Studio William Hefner, original photo on Houzz
Let’s Just Call It ‘Bloat’
The final category of reasons that kitchen renovations go over budget is basically entirely within your control.
7. Changing your mind. For your contractor to accurately predict the project cost, it’s a good idea to select all your finishes before the construction work starts. “If you haven’t picked them out, invariably it will be more money. Two, it will take more time. And three, it will mess up the schedule — which will also cost more money,” says Anne Higuera, co-owner of Ventana Construction in Seattle, which has worked with more than 250 clients since 2003.
Changing finishes or materials mid-project typically results in a change order, which can slow the timeline and increase the cost. “It might be a configuration of an island countertop we have decided on; they may not like it and want to change it,” says Gersdorf, the kitchen builder in Iowa. “Those things will definitely add to the cost.”
Even when they know making a change will add to the cost, some homeowners will still want to change the plans midway. In fact, this was the third most common reason kitchen budgets got blown, according to the survey of registered Houzzers.
8. Mission creep. This is the term for what happens when your kitchen renovation is looking amazing … and suddenly you decide you want to also redo the trim on the living room and dining room, and put in all new doors. “Suddenly your mission has expanded a little bit,” Gersdorf says. “That’s probably the No. 1 place where we see their budget get blown out more.”
Kitchen Reno 6: Original chart on Houzz
What Does a Typical Kitchen Renovation Cost, Anyway?
While it’s helpful to know some common reasons why kitchen renovation budgets expand, it could also be useful to know how much kitchen renovations typically cost. According to a Houzz survey of nearly 2,500 homeowners who were renovating or had recently renovated their kitchens, about one-third of owners spent between $25,000 and $50,000. Another one-third spent more than $50,000. These are national averages. The cost for you will depend on costs in your area. Typically costs on the coasts are more expensive than in the middle part of the country.
Costs also depend on the type of project, as well as the size of the room. A major kitchen overhaul, which includes at least replacing all the cabinets and appliances, costs about three times as much as a minor, or more superficial, kitchen renovation.
Kitchen Reno 7: Original chart on Houzz
How Often Do Renovation Budgets Get Blown?
Finally, a note about renovation budgeting. If you stay on budget, you will fall among the approximately one-third of Houzzers surveyed who renovated last year (all projects, not just kitchens) who also did. A little less than one-third exceeded their budget. Just 3 percent came in under budget.