In 2022, the new cottage industry is poised for a boom, not a bubble. In the mid-2000s, the country went through a real estate bubble, with money flooding the housing industry and significantly overbuilding speculative housing in hopes that buyers would be there.
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As most know, it was a bust when money dried up and unqualified buyers defaulted on homes. The current situation is different because qualified buyers are buying and living in homes and housing stocks are appallingly low. This is a veritable real estate boom, similar to that seen after World War II.
With the rise in home prices and the lack of inventory available, many current homeowners who may be looking to buy a new or different home are being left out of the market. If you’re thinking of selling that house you bought 5 years ago, it probably won’t get you a nicer house, even with the house’s equity.
This will force homeowners to remodel, and I’m really anticipating a multi-year remodel. Based on trends I’m seeing now and the new regulations coming, here are my top 5 remodeling projects for 2022.
Adding room or more living space to the house
If you live in a small house that has outgrown your needs, it is best to add square feet to the house. It can’t just be an extra bedroom, it could be a home office, a new bathroom, or a bonus room for family gatherings. With restaurant prices soaring, expect the home to become the new dinner party destination for many families.
Creating a home office in the house
Without a doubt, the COVID-19 pandemic and new technologies have transformed the way America works. Working from home saves companies billions of dollars in office costs and allows them to hire employees they may not be able to recruit. With tight labor markets, talent can work from anywhere and companies are changing their workplace paradigms. It could soon become commonplace for every new home to have an office.
Space for cooking at home
This is a growing priority, not only due to the high cost of eating out in restaurants, but also due to the fact that all home cooks are creating over the internet and direct home delivery of meal prep kits. Dinner parties at home are becoming more and more popular and to make them a success you need a nice kitchen with appliances in good condition.
I expect kitchen remodels will be booming soon as these new chefs and dinner party specialists want the best to impress their friends and family. Recently a good friend of mine bought a new air fryer oven for Thanksgiving, even though he has a stove that works perfectly. In other words, he bought a new $1,500 stove to cook a $30 turkey.
Upgrading this bathroom
Enjoying a glass of wine while soaking in a fantastic bathtub in a beautiful bathroom is the ideal scenario for many. For the homeowner trapped in their current home, a beautiful bathroom with all the modern luxuries would be the answer.
Expect bathroom remodeling with high-end faucets to become very popular over the next few years. The only problem is that due to supply chain disruptions that cause long wait times, homeowners have to be patient when ordering the high-quality fixtures and ceramic tiles.
Don’t forget windows and doors
When the new government regulations for energy efficient homes with tax credits are implemented, expect many new windows and doors to be installed in older homes across America. Many older homes have outdated, worn doors and windows that homeowners want to replace to improve attractiveness.
I expect strong activity on door and window replacements but this is being tempered due to supply shortages. If doors and windows were typically delivered with shorter lead times, this would probably be a top 3 project.
A remodeled older home is the homeowner’s ticket to maintaining the equity and getting what they want from their home. Due to the overall demand in the housing market, the line-up of subcontractors and suppliers will add an additional burden to the project, but there is no reason to wait. Get your project off the ground knowing it will take longer. Unfortunately, delivery times are unlikely to be any better in 2023.
Don Magruder is the CEO of Ro-Mac Lumber & Supply, Inc. and he is also the host of the “Around the House” show, which can be seen on AroundtheHouse.TV.