It was a good run. From 2001 to 2005, the American house rose in value by an average of 50 percent. That made it a no—brainer to take out a home—equity loan for ­redoing the kitchen or adding a master bathroom, and it created tidy profits for anyone who renovated and flipped a fixer—upper. Not anymore. The average home price fell last year, for the first time in the 40 years that the National ­Association of Realtors has tracked sales data. With all the turmoil in the housing market, it’s no wonder homeowners like you are skittish about investing in upgrades, even if you’re sitting pretty with a sensible, fixed—rate mortgage.

But every cloud, and perhaps every exploded bubble, has a silver lining. The slowdown has hit the construction industry hard and turned home ­improvement into a buyer’s market. And that makes this a great time for a project, whether you hire out or do it yourself. As long as you didn’t buy near the peak in a ZIP code where prices doubled or tripled and you plan to stick around to enjoy the results for a few years, there’s almost no way you won’t come out ahead. “Once you get past the psychological dimension and look at things objectively, there are a lot of good reasons to do a project now,” says Kermit Baker, senior research fellow at Harvard ­University’s Joint Center for Housing Studies. Here are 10 of them.

1 Money is cheap.
After years of overzealous lending to high—risk borrowers, banks have closed the proverbial barn door and tightened up their standards. But for anyone with three things—a good credit rating, at least 20 percent equity left in his or her home, and proof of income—lenders are as eager as ever to extend fat lines of credit. “They need to offset all of those bad loans with quality ones,” says Greg McBride, senior financial analyst at Meanwhile, the Federal Reserve’s cuts have driven down home-equity interest rates from 8.25 percent to 6.4 percent in the past six months alone, and analysts expect them to fall even further.

2 Contractors are taking small jobs.
A few years ago, contractors could afford to choose only big-budget projects, but now they need smaller jobs to keep their crews busy. Take northern Virginia contractor Tom Wotton, for example. “Our typical job was a 1,000 to 2,000 square—foot addition, for $200,000 or more,” he says. “Now it’s a $50,000 kitchen renovation.” Woodbury, New Jersey, contractor Jay Cipriani has dedicated a handful of his 21 staff tradesmen to “handyman jobs” with price tags of $15,000 or less.

3 You can get it done fast.
“Two or three years ago, when you called a contractor, it could be six months before he even returned your call,” says Bernard Markstein, the director of forecasting and analysis for the National Association of Homebuilders. “Today, all you have to do is think about a project you want to do, and three contractors will call you.” He’s exaggerating, of course, but gone are those 12—or 18—month waits. So as soon as you sign the deal for your new basement playroom, you’d better start clearing out the junk: The framing crew may show up in a matter of days.
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