Should You Remodel or Move?”

It’s a dilemma that literally thousands of Anchorage homeowners are facing because the vast majority of Anchorage’s housing stock was built prior to l990.  That makes the majority of Anchorage’s homes at least over 20 years old.  If you reside in one of these homes you know what I’m talking about. Roof repairs, siding repairs, a new furnace, hot water heater.  Cabinet doors falling off their hinges and chipped formica counter tops.  On the other hand, your lot is larger than lots for new homes.  Your landscaping is mature and contributes to an attractive front yard and streetscape. You love the lilac bushes that you planted when you first moved in that are now over ten feet tall. Your location is close to where you work so you’re saving on time and gas money.  But you hate the small size of your peninsula styled kitchen.  You haven’t used your dining room since last Thanksgiving and your master bath (if you’re lucky enough to have one) is the same size as the hall bath. In other words, it’s too small.

So should you remodel or move?  Well, that depends.  First of all, remodeling is expensive.  There’s a reason why we have all those Home Depots and Lowes stores on almost every major intersection in Anchorage.  Remodeling is profitable business both for the suppliers and the general contractors or handymen that do the work.  Having remodeled a home a few years ago, I can tell you from personal experience it will take longer and cost more money than you’ve budgeted. Suddenly, those light fixtures that you thought would look OK, don’t.  Your general contractor went fishing, moose hunting (that’s why I live in Alaska he said) and so you lost three weeks.  Your refrigerator door no longer matches the handles on your new double ovens.

There are really two types of remodels.  The first, and easiest, is the cosmetic remodel.  New carpet, new paint, new light fixtures, maybe even new kitchen cabinets, granite countertops and hardwood floors.  You won’t get all your money back when it comes time to sell your home but it will add value and most importantly, it won’t drag on the market for months.  There’s something fresh about a cosmetic remodel that doesn’t cost too much and take too much time.  It’s the same feeling you get when a woman wears a new dress or you drive a new car.

The second, and more expensive remodel, consists of moving walls, enlarging bathrooms, adding family rooms, adding a third bay to the garage (if there’s room on your lot to do so)and is more problematic.  Most homes in subdivisions were all built within a one to five year time period.  They are generally all about the same size (give or take a hundred to four hundred square feet) and therefore have a range of similar values.  When you deviate from that range with a major addition, your home may well become the most expensive home in the neighborhood.  And that’s where the old rule of thumb comes in—buy the least expensive home in the most expensive neighborhood you can afford.  Adding square footage will probably return you only fifty cents on the dollar.  And, to be perfectly frank, unless you hire an architect to design your addition, it’s probably going to look a little lop-sided.  You know what I mean if you have one of these homes in your neighborhood.

A major consideration as to whether or not you should remodel or purchase a new home depends upon your long term plans.  If you’re going to retire and move outside in five years, freshening up your home with a cosmetic remodel makes financial and aesthetic sense.  If, however, Alaska is your permanent residence; you plan to age in place and your current home is twenty years old, you might want to give serious consideration to a move now.

Interest rates are at an all-time low.  You will never get a cheaper 30 or 15 year mortgage.  The local residential contractors that have survived the worst real estate recession since the Great Depression are hungry for work and their square footage prices are less than they were two years ago. Resale appreciation has slowed to a crawl, if at all, so holding on to a decades old home isn’t going to gain you more value any time soon. Aging in place doesn’t sound very attractive in a thirty or forty year old home that will be plagued with unexpected and costly repairs.  Better to move to a new home now and not have to worry about the expense of replacing the roof or furnace.

Oh, and that big yard you’re giving up? You won’t have to hire someone to help you rake the fall leaves because you’re getting too old to do the work all by yourself.