The Yes, Homeowner

On December 19th, Yes, Man will mark Jim Carrey's return to the silver screen. Whether you've seen the trailer or read Danny Wallace's book, it's hard to miss the basic premise of this movie about a man who pledges to say yes to everything. As boldly and comically as Carl Allen (Carrey) agrees to this transformative decision, homeowners are having a distinctly harder time saying yes to home improvements. After avoiding a decline since 1991, the home improvement products market saw an estimated decline of 0.7 percent in 2007 and a more significant estimated decline of 3.1 percent in 2008, according to the Home Improvement Research Institute.

That said, the spirit of the movie should not be lost on its viewing audience in the long run. Despite the bleak economic forecasts, the HIRI continues to forecast an average growth of +5.9 percent annually over the next five years, a rate that will allow the home improvement industry to near $400 billion dollars by 2013.

Why You Should Say "Yes" to Home Improvements
For starters, you probably need to. According to the Joint Center for Housing Studies at Harvard University, this decade has seen "inflation-adjusted expenditures per rental unit averaged almost 35 percent below its peak level in the late 1980s, indicating underinvestment in the housing stock." Meanwhile, for homeowners, the JCHS notes that "about a third of owner-occupied homes are now at least 45 years old and an additional third is between 25 and 45 years old meaning that a large majority of homes are in increasing need of remodeling and repair."

This analysis follows most people's perceptions of the housing stock. In an unfortunate, catch-22 for Americans, as better and better energy-efficient technologies hit the market, the average homeowner is finding less and less spending power to invest in their homes. That said, you may not need a lot of savings to justify a home improvement. Replacement windows, for example, can immediately shave as much as 20 to 30 percent off your heating and cooling bills.

Tip: With a minimal down payment, and terms that make even the loan interest tax-deductible, your annual expenses may remain unchanged.

Why You Shouldn't Always Say "Yes" to Home Improvements
In principle, saying yes may be a useful guide to living life, but saying yes to everything is likely to create just as many problems as it solves. While you may not want to be a skeptic about life, blindly charging into a home improvement project is a recipe for disaster. Just as Carl pledges to spend an entire year saying yes, it may take 12 months or more to financially recover from expensive home improvement blunders.

Few people can afford to say "yes" to their every home improvement wish, but even if you did have the financial resources to luxuriate every last area of your home, you should make sure each remodel measurably improves the enjoyment of your home. Few home remodels actually pay for themselves, and a home with too many improvements may perform poorly when it comes time to sell. Most home buyers are interested in one or two distinct features in a home. It becomes hard to rationalize the extra tens of thousands of dollars these over-remodeled homes portend to demand.

Tip: The Golden Rule of any home improvement budget, whether on a specific project or a yearly allotment, is to spread your money around. Remember every dollar you spend on this project is a dollar you can't spend somewhere else in your home.

Learn to Speak Contractor
Learning how to speak Korean may sound inspirational and challenging, but in the midst of talking shop with a home improvement contractor, the temptation to let jargon go unexplained may grip unprepared homeowners. Whether this lack of communication eventually leads to problems with your project, knowing what's going on with your home is tantamount to being a responsible homeowner. Knowing a bit about your air conditioning or furnace, hot water heater or plumbing, roofing, or any other number of home installations may help you troubleshoot future problems.

Here's the advice of a Minneapolis homeowner who spent $13,000 on a porch addition: "Find a contractor who is willing to take the time to explain the construction plan, city permit requirements, and many of the little details that need to be considered."

Tip: If you think timidity may strike, write down a list of questions in advance to ask the contractor.

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