Even in slow market, homeowners keep busy with remodeling projects
Chicago Tribune
Thursday, April 12, 2007
By Lisa Bertagnoli, Special to the Tribune
Staring at a slow housing market, homeowners in the mood to remodel have several choices: Remodel but scale back on plans, not remodel at all, or say "what the heck" and continue full-steam ahead.
Heather Smith chose Plan C.Smith, 38, and her husband began an extensive remodel of their five-bedroom, 4 1/2-bath Winnetka home in February. The project has three basic components: improving the roofline, moving and enlarging the entryway and making the garage -- "a really obvious part of the home," according to Smith -- less obvious.
The project, scheduled to be finished in May, also will add an en-suite bathroom to one bedroom, a second-floor laundry room and an extra master-bedroom closet.
The price tag: $300,000. "We are definitely not scaling back," Smith said. Nor are the Smiths sprucing up their home to sell it. The couple plan to live in the home "at least through raising our children," who are now 8, 5 and 18 months old, Smith said.
Not that resale doesn't matter. The remodel will strengthen the house's curb appeal and "will make the house more salable," Smith said.
Nationally, the remodeling industry has slumped, along with the housing market. Remodeling expenditures in 2006 rose 6 percent, to $291.5 billion. Spending this year is projected at $294.5 billion, an increase of less than 1 percent over 2006, according to the National Association of the Remodeling Industry.
Returns on remodeling jobs are diminishing too. In 2005, an upscale bathroom remodel with a $38,000 price tag promised a 93 percent return on investment, according to publisher Hanley-Wood's annual Cost Versus Value Survey. In 2006, that same remodel returned 77 percent of the investment. Along similar lines, a $57,000 basement-refinishing job returned 90 percent in 2005, and 79 percent in 2006.
Those figures don't seem to be stopping Chicago-area residents from remodeling their homes. NARI's research shows that Chicago is the country's third-largest remodeling market (after New York and Los Angeles). Last year, area residents spent a total of $2.8 billion on remodels.
Area remodelers agree that remodeling is hot, with homeowners planning extensive improvement projects, especially in desirable areas.
Homeowners "are maxing out great locations," said Pam Albrecht, vice president of sales and marketing at Ferris Homes, a Northbrook Builder/Developer. Ferris Homes works primarily on the North Shore: "People love their location and have a tendency to invest money where they live, literally," Albrecht said.
"It's amazing what people will do to stay in a certain location," she said, offering zoning challenges and "all sorts of challenges working with the city" as examples of remodeling trials and tribulations. "This is not, 'let's do a new toilet for you,' " Albrecht said. Homeowners look for a reputable builder that provides services.
