Home Remodeling Gets a Big Lift from Tax Credits, Material Price Cuts and Lower Labor Costs

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A cost-to-remodel survey completed in March, 2009 by remodelormove.com reveals that thanks to the Obama administration's stimulus plan, the lowest price for building material prices seen in many years and contractors who are bidding aggressively for work the cost to remodel is 20% less now than it was in 2006.

remodeling stars have aligned for U.S. homeowners in 2009

The "remodeling stars have aligned for U.S. homeowners in 2009". Thanks to the Obama administration's stimulus plan - the American Recovery and Reinvestment Act of 2009 - building material prices that are at their lowest in many years and contractors that are bidding aggressively for work. The cost-to-remodel survey completed by remodelormove.com in March, 2009 reveals that homeowners can see savings of 20 percent on many of the most common remodeling projects.

Savings vary by state, region, and the specific project, but no matter where and what remodeling is being done, it is less expensive now to remodel than it has been for several years.

For example, a kitchen remodel in Arizona now costs a lot less than it did in 2006. The new windows, doors, roofing, and insulation materials can earn the maximum Federal Recovery Act tax credit (on one's federal income tax) of $1,500. The new credits apply to remodels and purchases made after the date of enactment of the Economic Stimulus Act for the cost of many products, including windows, insulation, roofs, sliding glass doors, garage doors, and French doors. To claim the new tax credits homeowners will be required to complete and file IRS Form 5695.

In Pennsylvania, in addition to the federal tax credit, the state offers the Keystone HELP Energy Efficiency Loan and Rebate Program to help homeowners improve the energy efficiency of their homes. The program includes several types of low-interest loans and, for projects completed after February 23, 2009, Energy Star rebates, and Advanced Performance Energy Star Rebates of up to $250 and $500, respectively.

A list of the different rebates, credits, and discounts can be found at remodelormove.com and dsireusa.org

In addition to the energy and stimulus package savings, the most common building products, such as lumber, dry wall, insulation, and plumbing fixtures cost 10 percent less now than they did in 2006, according to the Bureau of Labor Statistics

The cabinet industry is an example of what has been happening to the sales volume and cost of home improvement materials over the past few years. Sales volume at some manufacturers had dropped 40 percent by the end of 2008. But, in the first three months of 2009, sales rebounded by 10 percent. Many cabinet companies are offering discounts of 10-50 percent on some product lines

So, how does this all impact a typical kitchen remodel? This summary shows the savings potential.

An Example of a typical kitchen remodel in 2006

Cabinets $10,000
Flooring $2,500
Appliances $3,000
Countertop $5,500
Fixtures $2,000
Doors, windows    
Lumber, materials $2,000
Labor $15,000
Contractor Overhead & miscellaneous costs $10,000
Total 2006 cost    $50,000

The same kitchen remodel in 2009
Cabinets $8,000 - 20% savings from retailers
Flooring $2,000 - 20% savings from retailers
Appliances $2,500 - 17% savings from retailers and government programs
Countertop $5,000 - 9% savings from manufactures and retailers
Fixtures $1,800 - 10% savings from retailers and government programs
Doors, windows
Lumber, materials $1,500 - 25% savings from retailers and government programs
Labor $12,000 - 20% savings from contractors    
Contractor Overhead & misc costs $7,000 - 30% savings from contractors and retailers
Total 2009 cost    $39,800 - 20% savings from the cost in 2006

To achieve such savings, homeowners will need to take advantage of all the rebates and discounts on windows, doors, appliances, etc., as well as competitive bids from contractors and skilled tradesman. The online remodeling cost estimate calculators at remodelormove.com are a good way to get an initial budget for a project.

About Remodelormove.com:
Remodelormove.com is the online resource for homeowners making the decision whether it is best for them to remodel their current home or move to a new home. With its partner site, remodelestimates.com, the site provides information, unique and uniquely accurate calculators that compare costs, forums, seminars, and advice for homeowners.

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Barb Fujito
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