Just as the property for sale market is expected to remain competitive (translation: rising prices) this year, the focus on maintaining and improving homes is expected to continue.
According to Leonard Ang, CEO of online property guide iProperty Management, “The general trend is upward prices across the board. There have been severe supply and labor shortages in the home repair industry, and with more people working from home…people are better able to notice problems with their homes.
Take the cost of wood, for example. Prices then fell to $400 over the summer, then recovered to $600 in October, until prices climbed to $900 in late November.
Also in late November, the Biden administration announced that it would reimpose and increase Trump-era tariffs on Canadian softwood lumber from 9% to 17%. Ross Price, Mickey’s chief financial officer, said lumber prices “…may continue to rise to over $1,000 and beyond in 2022.”
“The general trend has been towards higher prices across the board.”
—Leonard Ang, CEO, iProperty Management
The reinstatement and increase of the Canadian Lumber Tariff in 2022 will increase the cost of projects such as shingling, repairing or adding exterior decks and roofing by a whopping +36%.
And if you have a major appliance that needs replacing, be prepared to spend more. Rising demand and limited supply are making it harder than ever to find a dishwasher or refrigerator due to supply chain disruptions, which are now expected to last at least until end of 2022. And the price is likely to be higher than you think. expect, or at least much higher than the last time you bought a refrigerator or a dishwasher.
According to the latest Consumer Price Index figures from the US Bureau of Labor Statistics, instead of the usual +3% annual increase for a major appliance, a dishwasher or refrigerator now costs + 12% more than last year. Washer and dryer pairs are up around +18%.
And by the way, retailer discounts and individual device discounts have now passed and are unlikely to return, if at all, until the supply chain backlog hopefully subsides. -on, end of 2022.
Luckily, there are ways to save on building materials and appliances:
1. Do all your product research now.
2. Stock up on what you know you’ll need, even if you won’t need it right away. This is particularly important for timber requirements as timber prices are expected to continue to rise throughout the year.
3. If you are placing a special order, order as soon as possible so that you don’t have to delay an entire project (e.g. kitchen remodel) for months and months due to waiting for that special order item finally shows up.
4. Ask about buying floor samples on appliances – you could get 15% to 30% off.
5. Call a contractor now to find out their work schedule. You will probably have to wait 4-6 months anyway, due to labor shortages and high demand.
How do I pay for necessary home maintenance, repairs and replacements?
The good news is that sky-high house prices have pushed the average capital gain to $56,700 per homeowner with a mortgage (as of year-end 2021) — more than three times the 2020 average, according to CoreLogic.
Homeowners with equity in their home may consider getting cash refinance to help pay for home repairs or renovations. The process involves refinancing your home for more than you owe on the existing mortgage. You get the difference to use on whatever you need.
Additional ways to cover home repair expenses include:
• Home Equity Line of Credit or HELOC – Tap into the value of your home as you need it for home improvements.
• Home Insurance Claim – Check your home insurance policy to see if an emergency home repair is covered. For example, a new roof may have part of its replacement cost covered if the roof has been damaged by a storm.
• Government home repair assistance through its FHA Title 1 insured home improvement loan program.
• For very low-income homeowners in rural areas and homeowners 62 years of age or older, the United States Department of Agriculture (USDA) Section 504 Home Repair Program offers grants to help pay for repair costs , improvement and/or renovation.
• Disaster relief funds are available through the Federal Emergency Management Agency (FEMA) for major repairs to safety or sanitary living conditions that are not covered by homeowners insurance .
• Credit Card – One in four homeowners say they would charge for urgent home repairs to a credit card. Think twice before using your card for two reasons: your available credit may not be enough to do the job; and your card could have a very high interest rate as you pay off repair costs over time.