The planners, builders, lenders, and the key holders are all clearly rooting for a housing-price bounce to help restore economic growth. But some design and remodeling experts are hopeful that the real estate crumble, painful as it is, has reformed how consumers view the idea of "home."
Advocates of individualized and beautiful design through construction that uses transparent pricing (compared to prepackaged, industry-driven trends) argue that a homeowner's dream property is often lurking within the existing footprint. Or, perhaps it can be achieved with a conservative expansion that can bring more of the outdoors in and the indoors out.
Whether or not long-term attitudes will change, there remains a sobering near-term reality: The housing recovery will be slow. Accordingly, many homeowners are looking at remodeling options to upgrade or bump out their existing dwelling rather than climb to the next rung on the property ladder (or even skip a few steps, which was common during the housing boom). In fact, the current real-estate climate can bring opportunity for savvy homeowners. Contractor bids are more competitive and contractors are more readily available.
During the housing surge ahead of the 2007-2008 credit crisis, significant portions of housing stock (both new and resale) became overly commoditized and threatened the sense of "homesteading" that emerged in the United States after World War II, argues Duo Dickinson. He's a Connecticut-based architect and author of Staying Put: Remodel Your House to Get the Home You Want, which hit bookstores in November.
"When money was inexpensive to borrow and the home you had in hand was always rising in value, the worth of your home (and what you thought about spending to improve it) was not much of a limitation on your expectations," says Dickinson. "It was guilt-free, binge-building gluttony on a massive scale, but now we all must go on a morning-after diet regime."
Nesting, not investing. Easy credit skewed some consumer expectations of home size, location, and price. But at a more intimate level, much of the personalization of homes was lost in the froth of the market. Homeowners and, in some cases, their real estate agents weren't necessarily thinking about giving the mud room priority for a young family of bike riders or acknowledging that a small efficient kitchen would satisfy a busy professional who never dirties a pot. Sellers and buyers were instead focused on buzz words like "granite" and "master suite."
Home buyers allowed the unrealistic promise of investment outweigh their actual needs and occasionally, their wants. Now, many are paying the price for ill-fated bets on home values; they're saddled with underwater mortgages (the loan is bigger than the home's worth). Some are determined to ride out the soft pricing patch and, in the meantime, are hoping to creatively stretch their current abode.
It's easy to see how investment can cloud the perception of "home." Housing remains the biggest single investment that most individuals or couples make in their lifetime.
But consumers can't entirely check their emotions at the front door. "Spending on homes often has nothing to do with economic potential and there is no guarantee ever that a house will get more valuable," says Dickinson.
Instead, the emotional part of homeownership should inform sound decision-making; the investment should be based on who lives there now. "It might make sense to spend $5,000 on a kitchen, or it might make sense to spend $50,000 on a kitchen you'll use every single day and love," Dickinson adds.
Bottom dwellers. There are signs of economic improvement, particularly in consumer and business spending, but anemic hiring and excess housing inventory is expected to continue to negatively impact the real estate market. Housing experts emphasize that market health should be judged on a region-by-region basis.