Uptick in remodeling activity a sign of the times

Mary Ellen Podmolik | Chicago Tribune | May 20, 2012

The weakest part of the housing industry is single-family home construction, but home remodelers are in line for an upbeat year.

After rising 3.5 percent last year, to $107.4billion, homeowner spending on remodeling projects is expected to increase 12 percent this year and an additional 8 percent next year, says a recent forecast by the National Association of Home Builders and Harvard University's Joint Center for Housing Studies.

That doesn't include spending by investors purchasing distressed properties and fixing them up either to resell or to turn into rental units. Add that in and the total spent was close to $300billion last year and is expected to increase.

Credit the anticipated spending to some of the same factors that have helped weigh down the housing market. The percentage of people who moved from one home to another in 2011, 11.6 percent, was at its lowest rate since the Census Bureau began tracking mobility in 1948. Because of declining home values, 26 percent of homeowners plan to stay in their homes at least 16 more years, and an additional 23 percent said they plan to stay put six to 10 years, according to a recent poll by the National Institute of the Remodeling Industry.

Also, homeowners in areas where the local housing market seems to have bottomed out may be more willing to invest in their properties again, taking on projects they deferred.

Consumers buying foreclosures or homes sold through short sales typically need to make improvements and repairs that last year translated into average spending of $7,300 during the first year of homeownership.

And finally, even homeowners with equity in their homes may decide that in the current market, trying to sell their home isn't worth the effort, so they'll tailor the home to their changing needs instead.

"The mix is going to change," said Kermit Baker, a senior research fellow at Harvard's Joint Center for Housing Studies. "It's not going to be driven by these upper-end projects. It's going to be driven by these smaller-scale activities and it's been deferred. There's a lot of folks who are not underwater or not that significantly underwater and aren't planning on moving anytime soon."

That's not good for would-be buyers who are waiting for choice inventory to come on the market. It's not good for homebuilders, either. But it's welcome news for remodeling professionals so long as homeowners have saved up enough for the projects or have the creditworthiness to borrow money.

Last year, the five most common remodeling jobs were bathrooms, kitchens, window and door replacement, repairing property damage and whole-house remodeling.

"Remodeling is (now) not driven by price appreciation or preparation for sale — by a lot of the things you'd normally thought of — but rather by simply good old-fashioned 'This is what I want. I want a place that is newer, has all the gizmos and is nicer to live in,'" said David Crowe, chief economist for the National Association of Home Builders. "It's a return to the real value of a home as a place that I will use rather than trying to gain appreciation."

Baker continues to believe that much of the remodeling industry's growth will come from changes made to homes to allow baby boomers to age in place. "That's going to be one of the really strong markets over the next decade," Baker said. "I'm really not sure the remodeling industry knows how to sell that population really well."

Lower rate and shorter terms: With interest rates on 30-year, fixed-rate mortgages that hovered under 4 percent, it's little wonder homeowners who refinanced their mortgages during the year's first quarter were eyeing more stable products and shorter loan terms.

According to Freddie Mac, 31 percent of borrowers who refinanced during 2012's first three months traded in their 30-year loans for 20-year, 15-year or shorter-term mortgages. Meanwhile, 68 percent of borrowers who had hybrid adjustable-rate mortgages refinanced by moving into fixed-rate mortgages, the highest share in a year. Mortgage refinancings accounted for 81 percent of mortgage applications during the quarter.

mepodmolik@tribune.com

Twitter @mepodmolik

The 24-hour kitchen facelift: Renovations that don't have to be a pricy, prolonged pain

(ARA) - Is your kitchen looking a little worn? Or maybe you've grown tired of your decor? No need to call in the remodeling crew. Instead, turn your Saturday into Satur-DIY, and with a few simple updates you can spruce up your kitchen - and spirits - in no time at all.

According to a recent Kitchen and Bath Business survey, 22 percent of U.S. homeowners are planning to remodel, but may be holding off for budgetary reasons. Small changes don't have to come with a hefty price tag. Here are a few ideas that don't take much time or money for a 24-hour kitchen facelift.

Fabulous fixtures
As the workhorse of the kitchen, start by upgrading your faucet - especially since an old or broken faucet can age your kitchen by decades. Pulldown faucets have become one of the most popular choices for their convenience and high-arc styling, and the new Benton pulldown kitchen faucet from Moen is a great example. The Benton faucet offers exquisite styling in today's most popular finishes - but it's what's inside that counts. Featuring Moen's unique Reflex pulldown system, Benton pulldown faucets offer smooth operation, easy movement and secure docking to keep the spray wand in place. Available at The Home Depot from between $199 and $219, you can make a big splash - even with a small price tag - at the kitchen sink.

Walls that say "wow"
Are your current kitchen walls blah or boring? Spice them up with a bold new hue that will make your kitchen decor pop. Not sure where to get inspiration? Take a cue from the color experts and designers at Pratt & Lambert paints, who just released their 2012 color trends with a palette titled "Echo" that features classic, bold colors.

Luxurious lighting
New lighting can add life to any room - kitchens included. Shed new light on your kitchen by forgoing the fluorescent and replacing with stylish and functional pendant-style fixtures above task areas, such as the kitchen island or countertops. Chandeliers can be an ideal addition above table areas to create a focus point and dress up the entire room's decor.

Add storage and style with shelves
Installing shelves in your kitchen is a great way to add more space, as well as create a new look. Install shelves over your sink or around the perimeter of your kitchen to hold items such as small appliances, knick knacks, cookbooks or framed photos to keep countertops clear and uncluttered.

Customized cabinets
No need to splurge on new cabinets when you can very easily customize your own. With just a few materials and hours, you can refinish or reface your kitchen cabinets. The process is quite simple, just remove the old finish by sanding the fronts of the cabinets and then either stain or repaint them to achieve your desired look. Or, for another option, replace wood panels with glass inserts for custom-looking doors that will show off your favorite dinnerware pieces.

Update appliance appearances
A stainless steel finish can instantly transform and upgrade the look of your kitchen. If purchasing new kitchen appliances isn't in the budget, a coat of paint may be just what the doctor ordered. Krylon offers a stainless steel spray paint with real flecks of metal to offer an authentic match for an upscale look. Remember to remove handles from the appliance and place masking tape over areas you do not want painted, and the end result is a new look that tailors to your kitchen's color scheme.

While it may seem like a daunting task at first, these easy, one-day kitchen picker-uppers can provide a refreshing expression that you - and your family - are sure to love.

Quick Tips for Sprucing Up a Kitchen in Need

Kitchens are no longer just for serving meals. For many families, this area of the home serves as a social spot for family gatherings, a home office or a study area for their children. Unfortunately, kitchens can also be the most expensive spot in your house to remodel. With that in mind, we have suggested some simple projects that you can do to spruce up your kitchen, without breaking the bank.

Add a little color and light
Add some flair to your kitchen by replacing your light fixtures with a stylish new chandelier or ceiling fan. This will help you update your kitchen, without spending a lot of money. Another way you can liven up your kitchen is with a new coat of paint. With so many new colors out there, you’re bound to find one that fits your style perfectly.

While you’re at it, consider replacing your light switches and vent covers – this will help freshen up your walls’ overall appearance.

Jazz-up your Kitchen Cabinets with some fun new accessories
Your cabinets are the focal point of your kitchen, so you need to make sure they’re always looking their best. An easy way to do this is by changing your cabinets’ hardware. Many hardware stores offer a variety of styles and colors, so you can easily find a set that embellishes your overall décor.

Give your windows a well deserved makeover
Over time, dust and dirt can collect on your window treatments causing them to look dingy and dull. By replacing your blinds or draperies with new ones, you’ll help rejuvenate your windows and enhance your kitchen’s look.

Top 100 Remodeling Markets for 2011 Provided by Remodeling Magazine

Though the economy has been tough on the real estate market, House Doctors is poised for growth in 2011 by continuing to provide customers with great service and a professional finished product in a timely manner. In addition, while the real estate market may still be far from recovery, the remodeling industry is expecting to see an upswing this year and House Doctors has remained the market leader in the professional handyman segment and expect to see an increase in business this year.

In the article, Remodeling Magazine breaks down the top 100 remodeling markets. A portion of the article is included below and it can be read in its entirety by clicking here.


Top 100 Markets
Our first annual forecast of the 100 hottest remodeling markets
By:Sal Alfano

While new-home construction is still in the doldrums, there is evidence that remodeling has hit bottom and is poised for an upswing in the coming year. But remodeling activity is mainly a local phenomenon, and although the overall remodeling market responds to global and national economic trends, some markets are likely to rebound faster than others. The question is, which ones? Our Top 100 Markets list provides the first real answer.

The Top 100 Markets list is based on the Residential Remodeling Index (RRI), a unique new metric designed to provide insights into and forecasts of remodeling activity by market. (The RRI was created by Hanley Wood Market Intelligence, a division of the company that publishes this magazine.)

Issued quarterly and seasonally adjusted, the RRI “Composite Index” measures the overall level of remodeling activity nationally and in 366 metropolitan statistical areas (MSAs). The index essentially benchmarks the current level of remodeling activity, both nationally and in a given market, against activity in 2007, the baseline year. A number above 100 indicates a level of remodeling activity higher than the level of activity in first-quarter 2007, which was the peak of remodeling activity nationally in the prior decade.

(Read More)