The Starter Home is Back (and Being Renovated)!

Sometimes good news takes a while to reveal itself. At least that’s the case with the latest data on U.S. real estate, which showed sales of existing homes decreasing last year, while home prices rose at a significantly lower rate — just 5% for the month of December, 2014 — than last year’s double-digit gains.


Here’s the hidden-good-news part, though: these modest price increases, coupled with lower mortgage rates, are likely to spur a rebound in sales of existing homes this year. [1]

And new home sales are on the rise. According to a surprisingly upbeat report published by the Commerce Department in January, sales in this category climbed 11.6 percent from the month before, sent aloft by a combination of strong hiring trends and lower mortgage rates. [2]

Once we let the imaginary cheering die down, let’s take a closer look. It turns out that significant gains were seen at the lower end of the new construction market; residences priced from $200,000 to $299,999 now account for about one-third of all new homes.

Who’s buying them? Millennials, it turns out. First-time buyers — usually couples in their late 20s or early 30s, according to the National Association of Realtors — are being “…enticed into the new home market,” Jennifer Lee, a senior economist at BMO Capital Markets, reports. [3] Factor in that mortgage qualification rules have relaxed somewhat for the first time since the U.S. housing bubble burst in 2008, and it’s easy to see why.

All of which could be great news for the DIY market. First-time homebuyers, typically young, are more apt to want to — and need to, for financial reasons — do at least some of their remodeling themselves.   Which should have a positive effect all the way up the DIY foodchain to the big box home improvement stores that have become a way of life for so many Americans.

Looking to spruce up your starter home, and new to the DIY universe? The secret is to scale down. Paint those tired-looking kitchen cabinets, for example, rather than replacing them. Home projects often — actually, just about always —look easier than they are. Start small, get good advice, and take your time. You’ll be ready for more complicated tasks soon enough.
The five projects below are great places to start. And since you’re banking on free labor (yours!), the pricetag should be relatively small. (Average materials costs from big-box home improvement stores are included below.)
Install kitchen backsplash—Brightening the area between cabinets and counter can change the whole look of your kitchen. The options are near infinite, including polished stainless steel panels (at $120 each) and decorative glass wall tiles ($19.99 for 8).
Add crown molding—Nothing makes a room look more regal. And, since you’re installing it yourself, the cost is anything but. Prices for wooden molding range from $18 about for 16 foot of composite, to $29 for primed pine.
Paint it yourself!The secret lies in meticulous prep work. And high-quality paint. Stenciling and other decorative touches — done carefully, please! — can really add to the look. Prices start at about $20 a gallon and go up, up, up.
Refinish wood floorsThe work is tough, but the rewards last for decades. Renting a buffer at your local home improvement store should cost about $50 a day; polyurethane floor finish weighs in at about $60 per gallon.
Replace your front doorMake a design statement up front, before anyone even crosses the threshold. Can save energy, too. Prices start low, at about $100, and can go well into the thousands.
Hang a ceiling fanThey cool rooms in summer, of course, but can also heat them more effectively in winter. Some come with lights, others without. Prices start at about $100 and go higher, depending on the bells and whistles.

As home improvements becomes easier to do, thanks to a certain ubiquitous gadget, more young people are likely to rise to the challenge.   And millenials working to make their new houses feel like actual homes will naturally turn to apps. There are ones for every degree of renovation, from light, decorative touches to projects that take you deep into lathe and plaster.   Their variety is astonishing — and they are proliferating.


Apps can show you how to measure a room with your smartphone or use it to calculate the number of tiles you’ll need for a shower stall. Many home improvement apps do many things at once. The This Old House app — a spin-off, of course, from the venerable DIY television show — can help you install an outdoor electric panel or inspire you with photos of “Drool-worthy Celebrity Bathrooms.” Zillow Digs, an off shoot of the real estate web site, takes users through streams of images, organized by room, and can even calculate the cost of your kitchen or bathroom project.

And let’s not forget the many apps dedicated to interior design, including one from House Beautiful, the shelter magazine, which recently waded into second-generation remodeling territory with an article on “10 DIY Projects That Are Past Their Prime (And How To Update Them).”

Given a market that favors first-time buyers, and gadgets that promise to make remodeling easy, it’s a safe bet that home improvement stores will soon feel the effect. In a good way.   It will be interesting to see how their foot traffic— and share prices — fare in the months ahead, as the weather warms up. (A disproportionate percentage the new home gains in December came from the Northeast, which reported a 53.6 percent jump in sales.) (4)

“These big box home improvement stores are like the air that you breathe as a remodeler,” Lee Wallender, about.com’s home renovations expert, wrote recently. The fact that they are, in effect, combined hardware stores and lumberyards is a huge timesaver, he points out. Which, for busy, app-addicted millenials, should have high appeal. More and more of them may be breathing that same air, as they remodel, in the time ahead.


(1) Data from CoreLogic, reported by the Associated Press, 2/3/15. http://www.stltoday.com/news/us-home-price-gains-weakened-in-december-on-slower-sales/article_2980b32e-5638-5440-8e08-87987ab54499.html

(2) http://www.nytimes.com/aponline/2015/01/27/us/politics/ap-us-new-home-sales.html

(3) Ibid.

(4) Ibid.

(5) http://homerenovations.about.com/od/planningtorenovate/a/Lowes-Or-Home-Depot.htm

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