236: Will Home Renovation Costs Go Down in 2024 as Demand Begins to Dip? w/WSJ’s Ryan Dezember

On The Market

BiggerPockets

News, Investing, Business, Education

4.8 • 820 Ratings

🗓️ 22 July 2024

⏱️ 33 minutes

🔗️ Recording | iTunes | RSS

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Summary

For the past four years, everyone, and we mean everyone, has been doing some form of home improvement. All your friends are redoing their kitchens, your spouse keeps asking when you can renovate the bathrooms, and your best friend just built their dream home office with—don’t get too excited—recessed lighting. This was the home renovation boom of the decade, and now, we could be at the tail end of it. With home improvement spending starting to dip, interest rates keeping homeowners from big projects, and labor costs still sky-high, what happens when enough demand leaves the market? Do material prices fall as manufacturers try to lure homeowners back in? Will labor costs soften with contractors waiting for work? We brought on The Wall Street Journal’s Ryan Dezember to get some answers. In today’s show, we discuss the boom and bust of lumber prices, why home renovations are starting to stall, what impact this could have on materials, and whether or not the home improvement spree will pick back up as new construction starts decline. If you’re planning a home renovation, you'll want to hear this episode before you begin. In This Episode We Cover An update on the home renovation industry and why demand is shrinking Labor costs and the factory-building boom that’s taking away all the contractors The surprisingly old age of most American homes and why so many renovations happened High interest rates and their effects on home improvement project spending Whether or not we’re already in the home renovation “slowdown” and what could happen next And So Much More! Links from the Show Join the Future of Real Estate Investing with Fundrise Join BiggerPockets for FREE Find Investor-Friendly Lenders See Dave at BPCON2024 in Cancun! Dave's BiggerPockets Profile James' BiggerPockets Profile BiggerPockets Real Estate 514 - How Small Landlords Can Beat the Hedge Funds This Could Be the Year the Home-Improvement Boom Fizzles Out. Here's Why. Deck Maker’s $450 Million Bet on America’s Renovation Boom Grab “The Book on Estimating Rehab Costs” Jump to topic: (00:00) Intro (02:36) The Home Renovation Boom (06:58) The Labor Shortage Explained (10:51) Which Costs Are Rising the Most? (14:44) High Rates Curb Demand (20:20) More Supply, Lower Prices? (25:59) Home Renovation Predictions Check out more resources from this show on BiggerPockets.com and https://www.biggerpockets.com/blog/on-the-market-236 Interested in learning more about today’s sponsors or becoming a BiggerPockets partner yourself? Email [email protected]. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Will home renovation costs ever become reasonably priced again?
0:05.0	And will Americans continue to just dish out whatever they have to pay for home remodels and renovations?
0:12.0	Because they're preferring to stay in place rather than trying to move to new homes.
0:16.0	Today, we're going to dig into the home repair market and what it looks like after the pandemic.
0:27.4	Hey everyone, it's Dave Meyer.
0:29.9	Joining me today is the master of home renovations and construction and James Danard himself.
0:36.5	James, I know that costs in terms of renovation and supplies have
0:41.9	really been impacting your business. So hopefully you'll have a lot of good questions for our guests
0:46.8	here today. Is boring as building cost material sounds? It's one of the most exciting things I can
0:51.4	talk about. It has such impact on a daily basis, and I'm always addicted to the deal.
0:56.4	Find cheaper products.
0:57.5	It's a puzzle right now to get your cost down.
0:59.3	Well, I'm glad we brought in you as the co-host today because you're probably the only
1:03.4	person on earth who thinks that this is super exciting.
1:06.2	But I agree that it's important.
1:07.9	Exciting or not, this stuff really matters. Because as an investor,
1:18.2	you want to understand how to be most cost effective, how to time potential renovations, when and where you want to add value to your properties. And so to help you understand that all,
1:22.9	we're bringing on Ryan December. He's a reporter at the Wall Street Journal, and he covers all sorts of things
1:28.6	like commodities, oil, natural gas, lumber, and rental houses. And today we're going to talk to
1:33.7	him about the stark rise in home remodeling costs from peepandemic numbers until now,
1:39.7	and what the true drivers of those costs are. And then we're going to discuss some indicators that predict what we may see in the future.
1:49.0	We're curious if we're at the tail end of a home repair boom.
	...

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