Homeowners Take a Fresh Look at Remodeling
Posted By susanne On January 27, 2013 @ 1:06 pm In RISMEDIA
(MCT)—If you’ve put off redoing that kitchen or adding a deck while waiting for the economy to perk up, welcome to the club.
Like the rest of the housing market, home improvements and remodeling plunged during the recession as consumers hunkered down.
But now that economic conditions are improving, the forecast for home fix-ups is looking up, too.
“Future market indicators, which have been lagging a little bit, have jumped up,” said Paul Emrath, a research vice president with the National Association of Home Builders. “Calls for bids and appointments for remodeling proposals are increasing significantly.
“They are basically as high as they have ever been,” Emrath told builders meeting for the industry’s annual exposition last week in Las Vegas.
The outlook for home remodeling in the year ahead is the best it’s been in almost a decade, based on the most recent remodeling industry surveys by the homebuilders’ association.
Home improvement expenditures are forecast to rise by almost a third from the worst of the market in early 2011 to late this year.
Remodeling fell by about 30 percent during the recession.
“That’s not as big as the decline in housing starts, which was closer to 80 percent,” Emrath said. “Our forecast is for slow and steady increases going forward.
“There is still pent-up activity waiting to be released,” he said. “We had a lot of projects put off as we went through the decline.”
Some remodelers say they’ve already seen a bounce in their business.
“Most remodelers definitely saw a rebound in the market in 2012 and are expecting continued growth in 2013,” said Lisa Parelli, president of the Dallas chapter of the National Association of the Remodeling Industry.
During the recession, more of the remodels that Parelli saw in the Dallas area were home facelifts necessary to fix up a property for sale. “But, now they are starting to see the bigger projects come back to life such as additions, complete tear-outs, whole house renovations,” she said.
Nationwide, the most popular home remodeling jobs, based on total expenditures, include kitchen remodels, bathroom upgrades and bedroom add-ons, according to a new study released this week by the Joint Center for Housing Studies of Harvard University.
“There is pent-up demand and stuff that has been put off,” said Harvard housing researcher Kermit Baker.
Baker said Americans have spent big dollars repairing and remodeling formerly foreclosed and distressed homes, about $10 billion in 2011.
Researchers are also predicting a surge in home retrofitting to improve energy efficiency. “We still think there is a lot of opportunity for greening up the housing stock,” Baker said.
Houston remodeler Bill Shaw said many homeowners get sticker shock when they finally decide to remodel.
“They still want new kitchens, they still want new baths,” said Shaw, who has been in business for 30 years. “All the ingredients for growth are there, until they find out how much it is going to cost.”
Shaw said during the recession when remodeling business lagged, his industry saw new competition from traditional builders.
“We’ve seen a tremendous increase in custom builders getting into remodeling,” he said.
And unlike in previous downturns, many of these builders have decided to stay in the home improvement business even as home starts increase, Shaw said. Home value declines in many markets during the last few years also made it tougher for remodelers. Lenders and appraisers wouldn’t OK expensive home improvements in neighborhoods where home prices fell sharply.
“As the equity and housing values increase, I think we will get back to more larger projects,” said Bob Hanbury, a remodeler from New England.
He said homeowners are more frugal when it comes to redos. “It doesn’t have as many of the bells and whistles; people are picking and choosing what they want,” Hanbury said. “You can’t provide them all the great features as in the past because their budget isn’t big enough.”
©2013 The Dallas Morning News
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