Should You Stay and Remodel or Move and Buy a New Home?

When given a choice, most Americans say they would rather upgrade their current home than buy a new one. But that does not mean renovating is always the best option. Homeowners thinking about moving or staying have been in their homes for some time, but the dwellings are no longer precisely what they need or want. They are at a decision point—do they put the house up for sale and move, or do they upgrade their homes to fit their lifestyle better? Redcastle Builders suggest that homeowners in this situation consider the following factors.

  1. Needs Assessment
  2. Real Estate Market Considerations
  3. Return on Investment

Need Assessment

Homeowners assessing whether to hire a remodeling company or buying a new home should take into account their greatest dislike and likes of their current home. They should ask themselves why they want a change, what impact will their decision have on their finances, and how much inconvenience they are willing to tolerate. Redcastle Builders created a roadmap to help homeowners to decide to move or remodel.

Moving Pros

Improve Finances – Usually, selling improves homeowners’ finances if their home is worth more than they owe. The equity from the sale will pay off their mortgage, cover the down payment and closing costs, and pay the moving expenses. They may downsize if they are house poor or the home is too large for their needs. Downsizing alleviates financial strains and gives them a place more suited to their lifestyle.

Gain A New Perspective – Sometimes homebuyers need a change. They should list everything they like and do not like about their current home and neighborhood. If they decide to sell, this exercise will help them find a home in the right location with all the desired amenities.

Avoid Renovation Stress – Moving allows homeowners to avoid the costs associated with remodeling. The average renovation in the U.S. costs $46,500, and the average gut and remodel $150,000. These costs are probably higher in Denver. Also, selling and moving avoids the hassles of living in a construction zone.

Moving Cons

Moving Costs – Selling a home does build equity. Still, homeowners need to consider all the costs associated with moving, like hiring movers and home inspectors, paying real estate commissions, and making repairs to place their homes on the market. They should add all these costs to the move or stay calculation. 

Moving Stress – Most Americans believe buying a home and moving is one of life’s most stressful events. Owners must ask themselves if they can juggle the stress of moving along with family and job issues. If not, they should consider remodeling instead.

Not Find What You Want – In tight real estate markets like Denver, there is a risk that home buyers cannot find a new house that meets all of their needs. Also, they might be unable to afford a home where they want to live.

Homeowners remodel their homes for many reasons. It is exciting to think that any home can be reimagined and reworked to become something new and better than what it was before. Below are the pros and cons of remodeling homes. An additional consideration is the return on investment.

Remodeling Pros

Customize To Fit Needs – Remodeling lets homeowners customize their homes to fit their personal and family needs. Once completed, their homes become more enjoyable and comfortable for their families and guests.

Increase Home Value – Attractive, well-thought-out renovations increase home value. Home improvements over time increase equity once they decide to sell.

Avoid Selling and Moving Costs – All the selling and moving costs identified above can be used for renovation.

Remodeling Cons

Risk Losing Money on Investment – The more money spent on remodeling, takes longer to recoup, which is not a problem for homeowners who decide to stay a long time in their home. They could lose money on their investment if forced to move because of life or job changes.

Hidden Construction Costs and Delays – Renovations always come with surprises, particularly jobs requiring structural changes, like moving walls and adding rooms. Also, it takes longer now because of supply chain issues with building materials and appliances. The tight labor market can cause delays. Hiring a reputable and experienced remodeling contractor like Redcastle Builders goes a long way to avoid surprises, unexpected costs, and delays.

Living In A Construction Zone – Living in a construction zone can be frustrating and inconvenient. Those who decide to live offsite have additional living costs. Homeowners need to be sure they can handle all the inconvenience and mental stress associated with remodeling before they pull the trigger.

We hope our decision matrix helps homeowners evaluate and prioritize their options when buying or remodeling their homes. Homeowners deciding to move or remodel should discuss these considerations with other household members. Including their loved ones in the process will make the decision easier for everyone.

Real Estate Market Risks

It is a good idea for homeowners deciding on moving or staying to look at real estate risk before deciding. The Denver area is an expensive real estate market, and higher interest rates make it harder to purchase homes. The days of cheap money are gone for at least now. Since March 17, 2022, the Federal Reserve has increased interest rates by 4.5 percentage points. Historically, recessions or near recessions are good times to renovate homes because high interest rates suppress new home building. Theoretically, decreased home building means less competition for contractors, subs, and materials, which reduces remodeling costs and improves completion times. 

According to the Denver Business Journal, there is more risk in putting a home on the market and moving. Even with inventory growing from last year, the number of homes sold last December was down 43.1 percent from a year ago. Homes are also taking longer to sell in the Denver area, with the average days on the multiple listing service increasing 138.9 percent from December 2021. Also, home list pricing is slipping for the first time in years. These trends probably make renovating a better option than moving.

What Renovations Have the Best Return?

Below are remodel ideas that have a good return on investment and improve the enjoyment of the home.  

Whole Home Remodels – Homeowners who believe the economy will be in a recession for a while and love their neighborhood should consider a whole home remodel. Whole-home remodels involve more than just kitchens or baths but renovating the entire floor of a house or more. While renovating a full house can be daunting, it will save time and money in the long term because all the work is done simultaneously with the same contractor. Redcastle Builders’ design and build approach maximizes the home structure by creating new spaces with desired finishes and fixtures, expanding the functionality of the entire home for our clients.  
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Kitchen Remodels – The old realtor adage of “kitchens sell homes” still rings true, but why wait? There is no reason to wait until putting a house on the market to consider a kitchen remodel. Kitchen remodels generate good ROIs because Redcastle Builders’ design & build kitchen remodeling process transforms these spaces into showplaces, maximizing cooking enjoyment and creating pleasant areas for friends and family to gather. 
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Bathroom Remodels – Homes with only one or one-and-a-half bathrooms can benefit from adding a lavatory. A dreary, outdated master bathroom gives no joy. On the other hand, stylish, modern bathrooms improve the enjoyment of the home. One of the most popular upgrades for full baths is swapping out a single pedestal sink with a dual sink, storage, and modern finishes such as granite. Many remodels replace tubs with walk-in showers. Homeowners can use Redcastle Builders’ extensive portfolio of completed work to get ideas for their bathroom project.
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Basement Refinishing – A great way to increase a home’s value is to refinish a basement. RedCastle Builders turns these unused spaces into home theaters, party rooms, wine, and game rooms. We offer superior design, competitive pricing, and expertise in creating finished basements.
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The decision matrix above should help homeowners decide to buy a new home or remodel. Those who choose to remodel should contact Redcastle Builders. We strive to provide high-quality projects and offer a unique and outstanding customer experience throughout construction. Please call us at 303-495-6255 or click here to complete a request service form.