Remodeling for Keeps

While everyone is debating the state of the economy and the speculating about when the real estate market will rebound, there’s one point most everyone can agree on.

????The trend toward delaying moves and staying put has been a boon for remodelers as more homeowners decide to upgrade rather than relocate.

????“Don’t move, just improve,” says contractor Jonathan Greaves, who says many of his remodeling clients had previously considered selling their homes until discovering that they were unlikely to get their hefty asking prices.

????Consequently his company, Greaves Construction, is getting busier. And so are others, both in the Bay area and across the country.

????Statistics from the National Association of Home Builders’ (NAHB) 2007 Remodeling Market Index registered 46.2, up from 44.8 the previous quarter. Any reading over 50 indicates that the majority of remodelers view market conditions as improving, so 46.2 isn’t exactly a resounding reading—but at least it’s trending upward.

????“The remodeling market is not experiencing the dip in production and sales being seen by the new-home sector,” says NAHB Remodelers Chairman Mike Nagel of Chicago.

While no one likes seeing a dip in any sector, Greaves says the slowdown in new construction does present a silver lining for homeowners choosing to remodel.

????“Materials show up quicker,” Nagel notes. “Subcontractors are there immediately. Job times are faster overall. That saves the homeowner money because remodeling is highly supervised and the less time I have to supervise, the less it will cost.”

And the future of remodeling looks bright, with growth projected even when the new-home market recovers.

????Americans spent $235 billion on home remodeling in 2007, according to the NAHB, up $3 billion from 2006. And remodeling, which currently accounts for 40 percent of residential construction, is expected to overtake new-home construction by dollar volume within the decade.

????Helping propel the remodeling market is the trend toward downtown living and the allure of older, established neighborhoods.

????People who already own property in desirable, close-in locales are using equity to finance improvements while people moving in are upgrading aging homes with new-home comforts.

????These established neighborhoods are pockets of opportunity for experienced remodelers.

????“Our major calls are for areas in the home that are used most,” says David Mueller of Mueller Remodeling. Naturally, kitchens and bathrooms top the list.

????“If you’ve got a crummy bathroom, you don’t look forward to stepping in there, bumping into the walls and looking at the mildew,” Mueller notes. “People like granite, nice plumbing fixtures, multiple showerheads, maybe even a whirlpool. They want to pamper themselves to a certain degree because they’re at the age where they feel they deserve it.”

????Mueller also says that, unlike the days when people were buying older homes and “flipping” them for a quick profit, homeowners are now thinking long term.

????“They know they are staying in that house so they’re not putting in cheap stuff,” Muller adds. “They’re putting in more expensive features that will last.” But should they decide to sell, they’ll likely recoup much of their investment.

????According to Remodeling Magazine, kitchen and bath remodels bring the highest returns. After one year, a minor kitchen remodel will return 82.7 percent on average while a bathroom redo will return 78.8 percent.

????Improving the home’s exterior is a good investment, too. New siding—one of the least costly projects listed in the 2007 Cost. vs. Value Report—averaged an 85.1 percent return.

????But a word to the wise when altering the exterior: make sure it blends with the character of the neighborhood.

????“You see some sore-thumb projects sticking out where they’ve gone for a Mediterranean look in a neighborhood where everyone else has ‘50s ranch,” Mueller says. “It’s better to match a project to its surroundings without making it look like it was remodeled and calling attention to it.”

????The same advice applies when adding an addition or second story, which happens frequently as growing families seek to increase the square footage in their homes.

????Frank Shirley echoes this sentiment in his book New Rooms for Old Houses. He writes: “For an addition to an old house to work, it must be in harmony with the original structure. Achieving harmony is not simply a matter of replicating what is already there, but of understanding the design principles of the original home and using them in your addition.”

????In other words, a remodel or addition is only as good as the firm responsible for the project—and choosing the right remodeler requires a bit of research.

????The National Association of the Remodeling Industry (NARI) has plenty of advice on the subject and a downloadable brochure filled with valuable information. The organization’s Web site has even more, including a list of questions you should ask a potential contractor.

????But do you always need a contractor? In fact, many smaller projects can be tackled by a skilled do-it-yourselfer. But even small jobs could end up costing you more, not less, if you run into trouble—and chances are you will.

????Remodeling is rarely without unexpected—and expensive—complications. These surprises have prompted many a DIYer to make a rescue call. Thus most remodelers have become skilled problem-solvers.

????“What we do is so much more difficult than working on a new home,” says Daniel Ashline, who does both, but specializes in remodeling. “Some projects get very complicated.”

????For example, moving plumbing, upgrading electrical service and relocating walls require a professional, and usually a permit.

????Just make sure that you choose a professional who is experienced in residential remodeling and the special challenges it represents. And someone with whom you are personally compatible.

????“You must be comfortable with the remodeler and able to easily communicate,” Ashline says. “They’ll be spending many hours in your home.”

????As remodeling heats up, more builders and contractors are getting in on the action. Membership in the TBBA Remodelers Council increased 65 percent in 2007, clearly indicating a strong interest in the remodeling sector of the building industry according to John Greaves of Greaves Construction, who serves as president of the council.

????To stand out in a growing crowd, many remodelers are earning professional designations that differentiate them as highly trained in a specific area. For example, in response to the demand for remodelers who are trained to deal with needs of older homeowners, NAHB created a designation called Certified Aging-in-Place Specialist (CAPS).

????Aging-in-place home-design techniques enable people to stay in their homes longer by making certain that accessibility is emphasized from the outset. Last year 16 contractors attended CAPS courses and earned the designation.

????“People aren’t really aware of what they can do to stay in their home,” says Greaves. “There are so many things that will make a home user-friendly, no matter what the situation.”

????One of Greaves first remodels 24 years ago was for an aunt confined to a wheelchair. “We made her whole house accessible, and it gave her the freedom to stay there,” he says. “So aging in place isn’t just for retiring boomers. It’s for anyone who wants to extend the useful life of a home through universal design features.”

????Similarly, interest in green remodeling is on the rise. In a 2006 survey of builders by Green Builder Media and IMRE Communications, it was found that 41 percent of buyers ask about environmental friendliness and energy efficiency. And when it’s time for a remodel, many are going green.

????According to the Sustainable Building Industry Council (SBIC), homeowners who choose to remodel green can lower their energy consumption by 30-50 percent. A NARI Green Certified Professional (GCP) will know how to seamlessly incorporate cost-saving and earth-sustaining concepts into projects.

????Some owners are looking for economical ways to increase the value and livability of their home. For others, cost is not a factor in creating the home of their dreams.
????Along that broad continuum, there's a remodeling solution for almost any challenge. All it takes is a plan, some patience, and a remodeling pro who can make it happen.

Doing Your Homework

When you hire a remodeler, you are buying a service rather than a product. The quality of service the remodeler provides will determine the quality of the finished product and your satisfaction with the result. Here are some steps to follow and things to keep in mind.

????The first step to hiring a professional is to build a list of candidates, and flipping through the Yellow Pages is not the ideal method. The best place to start is the Directory of Professional Remodelers (accessible online www.nahb.org). These home contractors uphold the highest professional and ethical standards in the industry.

????In addition, seek referrals from trade associations such as the Tampa Bay Builders Association (TBBA), as well as friends, family, neighbors, coworkers and others who have had remodeling work done. Independent trade contractors, building materials suppliers, architects, engineers, home inspectors, local lenders and insurance professionals can also provide reputable leads.

????Once you have developed a list of potential remodelers, check with the local or state office of consumer protection and the local Better Business Bureau. Ask if they have had any complaints about the remodeler. If so, were those complaints resolved satisfactorily?

Also check with the state’s licensing agency and state and local building inspectors to see if they have received any complaints about the remodeler and to verify that the remodeler has the appropriate licenses and registrations.

????You don’t want to just question the remodeler, but also learn first hand from the remodeler’s current and former customers.

????For more information, log onto the National Association of Home Builders’ Web site at www.nahb.org/remodel to read an online brochure.

????You can also call TBBA at (813) 873-1000 for a list of Remodelers Council members or visit the council’s Web site at www.tbba.net.

????Source: The National Association of Home Builders

Certification 101: Remodelers Sharpen Their Skills

In addition to being licensed by the state as contractors, many professional remodelers have specialized training or certifications. Both the National Association of Home Builders (NAHB) and the National Association of the Remodeling Industry (NARI) offer certification programs.

????NARI certification programs recognize the skills and achievements in five distinct groups of remodeling professionals, for example Certified Kitchen and Bath Remodelers (CKBR). This certification gives a homeowner an added sense of security knowing that the remodeling professional they hire has received an acceptable review by the NARI Certification Board.

????NAHB certification programs include several remodeling-specific designations, including Certified Graduate Remodeler (CGR), Certified Aging-in-Place Specialist (CAPS) and Certified Green Professional (CGP).

????CGR is an exclusive designation designed to emphasize business management skills as the key to a professional remodeling operation. These individuals have proven track records of success, must complete a comprehensive training curriculum and pledge to uphold a rigorous code of ethics. Graduates must also meet recertification criteria every three years.

????A CAPS designation indicates proven technical, business management and customer service skills essential to competing in the fastest growing segment of the residential remodeling industry—home modifications for the aging-in-place. Aging-in-place adjustments allow one to remain in their home regardless of age or despite any physical limitations.

????Similarly, CGP certification is on the rise. This designation recognizes those who incorporate green building principles into homes, without driving up the cost of construction. The training provides a solid background in green building methods as well as the tools to reach consumers.

????For more information about certifications, visit www.nari.org and www.tbba.net.
????Source: The National Association of Home Builders, National Association of the Remodeling Industry

Cost vs. Return
Each year Remodeling Magazine compiles a Cost vs. Value Report, the industry’s only detailed account of investment returns for remodeling projects. The report establishes cost-to-construct benchmarks for common remodeling projects then estimates how much of that investment will be recouped at resale in the current market. These are South Atlantic regional averages so they may vary from prices in Florida.

MAJOR KITCHEN REMODEL
Average cost: $52,659? ?
Average resale value: $41,766?
Expected return: 79.3 percent

MINOR KITCHEN REMODEL
Average cost: $20,221? ?
Average resale value: $16,727?
Expected return: 82.7 percent

FAMILY ROOM ADDITION
Average cost: $70,867? ?
Average resale value: $51,004?
Expected return: 72 percent

BATHROOM ADDITION
Average cost: $33,236? ?
Average resale value: $22,670?
Expected return: 68.2 percent

BATHROOM REMODEL
Average cost: $14,445? ?
Average resale value: $11,388?
Expected return: 78.8 percent

MASTER SUITE ADDITION
Average cost: $88,680? ?
Average resale value: $64,549?
Expected return: 72.8 percent

TWO-STORY ADDITION
Average cost: $127,072? ?
Average resale value: $99,464?
Expected return: 78.3 percent

HOME OFFICE REMODEL
Average cost: $25,438? ?
Average resale value: $15,209?
Expected return: 59.8 percent

DECK ADDITION - WOOD
Average cost: $9,266? ?
Average resale value: $7,936
Expected return: 85.6 percent

Source: Cost vs. Value Report 2007
(www.remodeling.hw.net)