2008 is forecasted as a flat year for real estate in most of the East Bay. As with most situations in life – opportunity exists in every market. New home construction is suffering one it’s worst slowdowns in history and a result of this is that lumber prices are falling dramatically.

Lumber prices have fallen over $30 per 1000 board feet since the end of August. Here is a short list of what is happening with lumber mills:

• 12/6 Umpqua Lumber announces temporary shutdown
• 12/13 Collins Pine plans two-week shutdowns
• 12/13 Riley Creek extends downtime
• 12/26 Harwood Products Inc. to shut down indefinitely
• 12/28 Sierra Cedar Products plans permanent closure
• 1/2    Portac to shut down Tacoma sawmill

Savvy homeowners looking to maximize future appreciation will take advantage of this situation. Similar price declines will hit other products as the ripple effect from the stagnating U.S. housing market continues to spread through the economy.

Construction contractors are hurting for business. Now is the time to negotiate a really good deal on that remodeling project or addition to the house.

If you’ve been thinking of a major remodel, but don’t feel the time is right – do yourself a favor and just get a couple of bids to test drive just how much negotiating power you have. The result should convince you that now is the time to strike the deal.

Related Posts:

• East Bay 2008 Forecast
• Walnut Creek 2008 Forecast
• Danville 2008 Forecast

Not only is it an excellent market for move-up buyers, but conditions are favorable for saving money on that remodeling project you may be putting off.

According to the news media, the fallout from the upheaval in the subprime lending market has added to the real estate market blues. Those of you thinking of remodeling might want to consider going against the trend of waiting on the sidelines until the market improves and break ground now while conditions are more favorable.

Why Remodeling Now Could Save YOU Money

Many factors contribute to your ability to get the best deal on your home improvement project. There are three lucrative reasons why you might want to hire a contractor now rather than putting off that remodeling job.

• Lumber is Cheaper – Because of the slow down in the housing market, construction is down. Lumber mills have too much supply, so they’ve cut prices to move more product. However, lumber mills will adjust to supply and demand and you can bet that lumber prices might not stay low for long.
• Home Equity Levels Remain High – Even with the housing market slowing down, housing prices are still at all time highs leaving many homeowners with equity to leverage for remodeling.
• Contractors More Available – With the slowdown in new construction, more contractors are in the market for work. For the savvy homeowner, such an environment is an excellent time to find someone to take on a project. You are much more likely to be able to negotiate lower and more competitive bids.

Cost vs. Value Report 2006

What's the payback for remodeling? Remodeling Magazine's annual report compares construction cost with resale value for 25 common remodeling projects in 60 U.S. markets.

The 19th annual Cost vs. Value Report shows that prices continue to climb for most remodeling projects at the same time the value of improvements at resale returns to 2002 levels. None of this should come as much of a surprise to industry professionals, who have been riding the crest of the remodeling boom for several years, and this year's data confirm the housing slowdown many parts of the country are experiencing. Should you be worried? That depends on how fast and how far the housing market falls, but remember that both new construction and remodeling activity have been at record levels in recent years. Some adjustment is inevitable, but indications are that the current downturn represents a return to "normal" levels and that the prospects for remodeling remain bright.

Here are the Pacific Regional Figures

Need to buy or sell real estate in the TriValley area? Check out The Harper Team's written guarantees.