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Remodeling Set to Surge as Consumers Feel Better about Spending Again
Posted By susanne On February 12, 2011 @ 12:01 AM In Consumer News and Advice,Foreclosure Process,Home Owner News,Homeowner's Toolkit,Real Estate,Real Estate Information,Real Estate News,Real Estate Trends,REO Properties,Today's Marketplace | Comments Disabled
RISMEDIA, February 12, 2011—(MCT)—With the economy starting to recover, consumers feel better about spending again—and that spare cash is going back into their homes. Home remodeling is on an upswing after the industry’s worst slump since at least the early 1960s.
Scores of foreclosed properties need a ton of TLC, prompting buyers to renovate those tired or tattered spaces. Many other homeowners want to improve because they don’t plan to move—either by choice or by circumstance.
Some love their homes but say they’d be more comfortable living there longer if they had new kitchens and baths.
Others are caught in the housing conundrum, unable to sell and move because they owe far more than their homes are worth, a particular problem in areas where housing boomed, then tanked. As a result, they’re investing in new floors, replacing windows and doors, and making other changes as they wait for home sales and prices to rebound.
“A lot of people are saying, ‘We’re here for the long haul now,’” said Bill Feinberg, president of Allied Kitchen & Bath in Fort Lauderdale. “My showroom has been nonstop busy. We’re getting big orders on a consistent basis.”
An Allied client, Ilana Mosser, recently completed a renovation to her Coral Springs, Fla., home she bought in 2002.
Mosser said the house “had good bones to it” but the decor was dated. So she and her husband, Ken, gutted the kitchen, ripped up the tile, renovated a bathroom, removed the popcorn ceiling and added hurricane-proof windows, among other changes.
Their goal: Make the house an oasis, a place where they and their daughter Valerie, would want to stay for 15 years or longer. “Who’s going anywhere?” said Ilana Mosser, a headhunter for physicians.
Harvard University’s Joint Center for Housing Studies last month issued a report that revealed the nation’s home improvement market, at nearly $290 billion in 2009, stands to benefit from a post-recession glow of sorts. The report predicted that spending on home improvements would increase at an average 3.5% pace in the next few years.
Nationally, consumer confidence has reached its highest point since May. And a recent survey from the University of Florida indicates that Florida residents appear more willing to reach into their wallets than they were over the past few years.
Residents without equity in their homes are raiding their savings accounts and embarking on more budget-friendly upgrades, remodelers say.
For many, though, financing remains an issue. Banks have been reluctant to lend during the past few years, preferring instead to boost capital amid the recession.
But Ward Kellogg, chief executive of Boca Raton, Fla.-based Paradise Bank, said he expects banks to start lending more in the next year.
Low home appraisals have been the biggest hurdle in qualifying for home equity loans, Kellogg said. One way to remedy that: include the value of the improvements in the appraisal. “That will help get the loan done,” he said.
Before starting a remodeling project, a homeowner must get a building permit. Mike Fichera, Boca Raton’s building official, said homeowners have been going after lucrative tax breaks and other rebates for energy-efficient upgrades to windows, doors and air-conditioning units.
“I’ve never seen so many air conditionings get changed out,” Fichera said.
Remodelers and contractors say they have noticed a definite trend in moving less and renovating more.
Scott Whiddon, president of Causeway Lumber Co., a Fort Lauderdale institution since 1939, said South Florida homeowners are making far fewer home additions and are more interested in replacing features.
With the collapse of the home-building industry in recent years, more contractors are available and looking for remodeling work. Allied’s Feinberg said he gets roughly five calls a week about job opportunities.
Barbara Gunning bought a four-bedroom Boca Raton home in 2009 and decided to renovate it last year. She and her husband upgraded the swimming pool and added hurricane windows, customized closets and renovated the kitchen. They also improved the landscaping and extended the patio. “This is it,” Gunning said. “This is our retirement home.”
Real estate appraisers and other industry professionals caution homeowners to make smart improvements that will boost property values and attract buyers when it does come time to sell.
Solid wood cabinets, stone countertops, up-to-date appliances and under-cabinet lighting are features that almost all buyers will appreciate, remodelers say.
But forget about especially bright or odd-colored paint. And a homeowner can shell out $20,000 to $25,000 for a swimming pool, but it won’t add nearly as much value to the house.
Still, Frank Smith, owner of J.F. Smith Design & Build in Fort Lauderdale, said that when it comes to renovations, homeowners shouldn’t worry about adding resale value and guessing what future buyers might like. “You’re doing it for your own enjoyment,” Smith said. “That’s where the real value is.”
(c) 2011, Sun Sentinel.
Distributed by McClatchy-Tribune Information Services.
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