There is a definite shift in the air right now. We see it in the housing market, where homes are taking longer to sell and prices have softened from where they were a few years ago. Buyers are being more cautious, homeowners are thinking differently about their next move, and there is a little more uncertainty around what the housing market will do next.
So it raises a fair question:
If home prices are coming down, shouldn’t it cost less to renovate a home too?
Unfortunately, the two don’t work quite the same way.
The Price of a Home and the Cost to Build One Are Different Things
The resale value of a home is influenced by things like location, land value, interest rates, inventory, buyer confidence and how many people are currently looking to buy.
The cost to renovate that home is driven by something different.
It comes down to the cost of labour, materials, trades, equipment, transportation, permits, engineering and the standards we are required to build to. Those costs don’t necessarily fall because the resale market has slowed.
That disconnect can feel strange.
Your house may be worth slightly less on the market than it was a year ago, while the cost of installing a new kitchen, building an addition or renovating a bathroom has continued to rise.
But they are really two different markets.
Construction Costs Rarely Move Backward
After almost two decades in the construction industry, we have seen material and labour costs move in one general direction over time:
Up.
There are the odd exception, one of the most dramatic examples was lumber during COVID. Prices soared and then came back down. If you were framing an entire house during that period, you would have seen a difference in costs.
But that isn’t typically what happens across an entire renovation.
Cabinetry increases. Electrical labour increases. Plumbing fixtures increase. Flooring increases. Drywall, insulation, paint, concrete, mechanical systems and skilled labour all change at different rates.
One material might come down temporarily, but the overall cost of completing a renovation rarely sees the same kind of reset.
We Also Build Different Homes Than We Used To
There is another part of renovation pricing that sometimes gets overlooked:
Our expectations have changed.
Many of the homes we grew up in had laminate countertops, sheet vinyl flooring, basic acrylic shower surrounds and fairly simple lighting and plumbing packages.
Today, homeowners are often looking for quartz or natural stone countertops, tile showers, custom cabinetry, engineered hardwood, larger windows, specialty lighting and more detailed finishes.
Building standards have also continued to change. Energy efficiency, ventilation, insulation, electrical requirements, waterproofing practices and other construction standards have all evolved.
In many ways, we simply build better than we did 20 or 30 years ago.
That is a good thing. But better materials, better building practices and higher standards have a cost attached to them.
So Is This Still a Good Time to Renovate?
We think it can be. Not because renovations are suddenly inexpensive.
And not because everyone should renovate simply because construction costs may continue to rise.
But a slower housing market creates an interesting question for homeowners:
If you already like where you live, does moving actually solve the problem?
Selling your current home, paying the costs associated with moving and purchasing another home doesn’t necessarily mean you end up with the house you want.
The next house may still need a new kitchen. It may still need bathrooms updated. It may still need flooring, electrical work, better storage or a layout that suits the way your family actually lives.
Sometimes the better investment isn’t finding a different home. It is making your current home work better.
If you like your neighbourhood, your property, your schools, your yard or simply the place where you have built your life, maybe the questions are a little different:
What isn’t working in our home right now?
What would we change if we knew we were going to stay here for another 10 or 15 years?
Would renovating give us more of what we’re looking for than moving would?
Would we enjoy our home more? Would we use our spaces differently, have people over more often, or simply feel better living in it every day?
And maybe most importantly:
What could this home become if we made it work the way we actually want to live?
