It's a good time to negotiate a bargain on a home improvement -- even if it won't do a lot for your home's value.
Many homeowners are reluctant to put money into a home improvement for fear their home value will decline anyway.
Home improvements, once used to help boost the value of homes, are the latest victim of the housing crisis.
Harvard's Joint Center for Housing Studies says home improvements are set to decline by an annual rate of more than 11 percent into the first quarter of 2009.
Kermit Baker, director of the Remodeling Futures Program of the Joint Center blamed weak home sales and the growing inventory of unsold homes for discouraging upper-end remodeling in many areas. Weak home sales and swelling inventories are the byproducts of a housing market plagued by foreclosures and tight underwriting standards.
The fallout prevents new home purchases and refinanced mortgages that often result in cash pulled out for home improvements. The same areas with the worst foreclosure conditions, California, the Southwest and Florida, are also finding fewer homeowners engaging in home improvements.
Still, long term forecasts expect industry growth, Harvard projects a 44 percent inflation-adjusted increase in the remodeling business nationwide from now through 2015.
Homeowners who make home improvements now will be better positioned for the next spurt in home prices.