Tuesday, April 28, 2009

Home Improvements Better the Economy

I have this my friend down the street that I'll simply describe as fiscally fortunate. For years everyone has been asking him why he doesn't move his family into a bigger house across town. His answer, "Why would I?" And now he's just finished remodelling his entire house, not to make it bigger, but to better suit his family. Is this smart during an economic downturn?

Oh yeah, this guy is very smart. He's living well in house that meets his needs within a smaller space and smaller mortgage. Sure he might be able to afford the bigger home, but he doesn't want to take a gamble with his good fortune.

And then there is my friend, Bob. He popped in the other day to chat and seek job references. He stops in every couple of months like this. He was finishing a basement down the street and wondered if I knew of anyone needing remodelling. Bob did our basement about 3 years ago. He did good work so we've recommended him to several other people. What was remarkable about this visit was that Bob said this is the first job he's had in six months.

"Really," I was surprised, but shouldn't have been I guess. But, I look down our street and see the wave of "For Sale" signs that have sprouted as they do every spring. Of course there are probably a variety of reason for the moves. But I'd bet that not everyone needs to move.

Loan rates on home equity loans and lines of credit are really good right now. Selling a house, however, is tough. Improving your existing home could save you money and add to the value of your home. And just think, you might even get a better price for your house sometime in the future.

Remodeling projects, or the lack of have an affect on the overall economy. When people like Bob are unemployed so is his assistant, his electrician, the plumber, the carpet layer, the painter and the tiler. Then when these people are out of work they're not ordering supplies and the suppliers aren't restocking their inventory and the factories produce less and layoff workers. Conversely when Bob and his team are working everything starts rolling again. The whole thing is interconnected.

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