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Homeowners, still cautious, choose moderate remodeling

15.09.11

Chris and Jennifer Roman loved everything about the handsome Tudor-style house on Minnehaha Parkway, so they bought it within hours when it hit the market.</p><p> Never mind that the kitchen had been remodeled in the 1980s with blue counters and bump-out windows, and the basement looked like a dungeon. Now, after two years of planning and saving, crews are ripping apart the old kitchen in preparation for a new one.</p><p> The dark and musty basement, however, is going to have to wait.</p><p> "We don't want to repeat history," said Jennifer Roman, referring to a big loss they took on a house they recently sold in Arden Hills, Minn. "If things were better and prices could support a larger loan, we would have done the basement at the same time."</p><p> It's a common story for homeowners. Many are moving ahead with improvement projects, especially since the unpredictable housing market could make it less appealing to upgrade to a nicer house. But they are scaling back their ambitions and spending less.</p><p> Home contractors are feeling the pinch.</p><p> "It's not easy," said Scot Waggoner of W.B. Builders. "We're working harder for less money."</p><p> Waggoner, however, isn't complaining. Unlike many of his competitors who have gone out of business, he said that he has seen an uptick in business, especially from people like the Romans, who are getting such good deals on houses they can finally afford to fix them up a bit.</p><p> National data from BuildFax shows remodeling work picking up during the housing slump. But some observers think the surge mostly reflects fix-up work on foreclosure properties that previous owners have trashed. That's led to remo-booms in the cities hardest hit by foreclosures, such as Las Vegas and Phoenix.</p><p> "There is a somewhat popular belief that remodeling activity is counter-cyclical to new construction and that's just simply not the case," said Jonathan Smoke, an economist with Hanley Wood. "Both new construction and remodeling activity are correlated to overall economic performance."</p><p> The Romans, for example, would have preferred to tackle their entire wish list all at once. Instead, they're going to wait until they can save a bit before they give their basement a much-needed makeover. "It's super-creepy," Jennifer Roman said. "It has dark purple carpet and weird electrical outlets."</p><p> One of the couple's challenges has been identifying comparable home sales in the neighborhood that will help their banker justify approving a loan to finance the project. Many houses are selling for less than their owners have invested in them, so that means more conservative approvals. While the Romans managed to get the kitchen project done, they won't pursue a financing package for the basement, at least for now.</p><p> With so many homeowners making similar choices, contractors are waiting, too.</p><p> "You would think that remodelers are partying all over the country," Smoke said. "But I'm certainly not seeing that."

Source: Kansas City Star