To Renovate or Relocate?
By : J. David Chapman/June 13, 2024
The pandemic brought about an unpredictable situation. Because people and families found themselves spending significantly more time at home working, studying, vacationing, and just simply living, they became discontent with their home and amenities. All those inconvenient, irritating little nuances in our homes suddenly made us consider a remodel or even a move to a more suitable home.
It seems like nearly everyone was considering a change. The decision was whether to relocate or remodel. Relatively affordable housing prices prior to the pandemic and lower interest rates made the decision to relocate very attractive. Unfortunately, due to the number of people who chose to do so, the lack of home inventories due to supply-chain interruptions and labor shortages made that affordability short lived. Coupled with the increase in interest rates, the relocation option was made much more difficult.
With relocation to a different home less attractive, and the irritants of the current living space still more visible than ever, homeowners turned to renovating and remodeling as an alternative. Whether remodeling their current home or renovating another home, I believe home renovation could be a solution toward affordability.
Renovating existing homes can increase the available housing stock without the need for new construction. This can help meet housing demands in areas where there's a shortage of affordable housing. It has the potential to revitalize communities and breathe new life into neighborhoods, increasing property values, and making them more attractive places to live. This can spur further investment in the area, benefiting both current and future residents.
Probably my favorite advantage is the preservation of the historic character that renovating older homes can provide. This can be particularly important in areas with historic significance, where maintaining the existing housing stock contributes to the overall cultural identity and appeal of the neighborhood.
Renovating existing homes can sometimes be more cost-effective than building new ones from scratch. This can result in more affordable housing options for buyers or renters, especially if the renovation focuses on improving energy efficiency and reducing maintenance costs. Renovating existing homes can be more environmentally sustainable than new construction since it reduces the need for additional resources and energy associated with building from the ground up. However, it's essential to consider potential challenges and limitations, such as the cost and feasibility of renovations, regulatory hurdles, and ensuring that renovations are done in a way that doesn't exacerbate gentrification or displacement of existing residents.
Dr. J. David Chapman is Professor of Finance & Real Estate at The University of Central Oklahoma (jchapman7@uco.edu)