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The Wait to Renovate
Luis Orozco, with his three daughters, and his wife, Birgit, thought about buying a larger house, but decided to renovate instead after finding they could not afford to move up in their own neighborhood.
(Photos By Hans Ericsson For The Washington Post)
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"In our case, we liked our location, we liked our neighbors and we liked our neighborhood," Orozco said. "Because we hired this company, we'll be getting exactly what we wanted, designed exactly the way we wanted" at a price below the cost of new houses much farther out.
An unexpected bonus, the family says, is that the townhouse they bought last November to use while their house was under renovation has also appreciated significantly.
"We're turning out to be pretty good investors," Orozco said. "Since I purchased it and moved in, it's increased 20 percent in value."
Vienna is full of renovation, he added. "Within a mile of us, there are 12 to 15 construction projects underway, with a mix of teardowns, remodeling or new custom houses."
And it's not just Vienna.
The whole Washington area, chockablock with small houses built after World War II, is busily being redone, say contractors and architects. The housing market has been so strong, they say, that families can tap into their skyrocketing equity to remodel or to buy trade-up houses that they will want to renovate or tear down.
Waiting lists of a year are typical for some design/build companies because of the intense demand, said Anthony Wilder of Anthony Wilder Design/Build Inc. in Bethesda. But "people are throwing money at us," because they've made so much on their current homes during the past five years, he said.
"Lots of people are putting impressive amounts of money into their houses," said Mark Scott of Mark IV Builders in Bethesda at a recent remodeling seminar.
With prices in some parts of the Washington area doubling over the past five years, homeowners aren't hesitant about drawing out equity for renovations, Scott said. And they aren't afraid of the future either, he added.
In many of the communities where he works, houses typically cost at least $700,000. Buyers are "also paying another quarter of a million dollars to bring it up to their standards," Scott said.
"They don't have any money in the bank," he said, but they're not worried because they're counting on future appreciation. "They have a tremendous tolerance for risk."
Bill Mulholland, vice president of design/build and kitchen and bath at Case Design/Remodeling Inc. in Bethesda, said his firm will do more work this year than last. That's a pace second only to the height of the tech boom, when wallets were fattened by soaring stock prices.
