The Economics of Taking a Dip

By Jonathan Starkey
Washington Post Staff Writer
Saturday, August 15, 2009

With home equity lost to a burst housing bubble and homeowners strapped for cash, backyard swimming pools aren't making quite the splash they were three or four years ago.

Contractors say sales of pools -- similar to other big-ticket items -- are off 15 percent or more compared with last year. As a result, companies are cutting prices and offering other incentives.

"We're willing to take a little less to get things going," said Frank Firetti, sales manager at the Manassas office of Blue Haven Pools.

Locally, the contractor is cutting $2,000 to $4,000 off the price of an in-ground pool, which can cost $40,000 to $60,000, Firetti said.

Firetti said the company built, or at least began work on, 391 pools in Virginia, Maryland and the panhandle of West Virginia in the boom year of 2005. It has finished or begun work on about 60 so far this year, with 20 more or so in the works.

Anthony & Sylvan Pools is offering 5 percent discounts to customers in the northeast who make payments online, said Tom Casey, the national chain's vice president of sales. Other deals are being offered across the country to stimulate sales, Casey said. Pool sales at Anthony & Sylvan have suffered with the downturn but have begun to stabilize this summer, he added.

"Deals for our swimming pools right now are very aggressive," Casey said. "There's a lot of trepidation. People are concerned."

Not everyone is taking a pass. Some families are opting to build a pool instead of spending money on passing extravagances.

Larry Ruggeri, owner of Calm Water Pools in Clarksburg, said he has built 13 pools so far this year -- with two more on the way.

"They are telling me they are cutting out their vacations," Ruggeri said. "They're not taking exotic vacations; they're investing in their homes."

Still, buying a pool is hardly an inexpensive alternative to vacationing. But if the pool is already there, homeowners seem more comfortable spending to keep it going over the summer.

"We've seen a tremendous increase as far as service work goes," said Jeff Kessler, owner of Pooltek, a pool service and repair company in Rockville.

Kessler charges clients $3,000 for weekly maintenance throughout the pool season, which includes chemicals and opening and closing the pool. Pooltek's service business, including the installation of heaters, is up 10 to 15 percent, Kessler said.

On the other hand, Pooltek's renovation business is down about 50 percent. Such projects, to do things such as resurface pools and lay new stones and tile, can cost $10,000 or more. Pooltek has found far fewer takers willing to spend that kind of money during the downturn.

There's hardly a financial incentive to sink big money into a pool.

As investments, swimming pools have traditionally been viewed as duds, particularly when compared with such buyer-enticing incentives as new bathrooms and upgraded kitchen appliances. A 2003 study sponsored by the National Association of Realtors showed pools adding 5 to 10 percent to the value of a home in the Southeast, which includes the Washington area.

Consider this example: On a $350,000 house, 8 percent equals $28,000. The cost of a pool and its installation -- say, $40,000 for a small one -- dwarfs that. Then there's the ongoing expense of maintenance. Chemicals to treat the water can cost $500 to $700 for one season, plus $800 or more for a pro to open and close the pool, said Terry Brown, chairman of the Association of Pool and Spa Professionals and vice president of a pool service company in Cockeysville, Md. Add in extra costs of electricity to power the pumps and gas for heat, and a pool can be a pricey amenity.

For those hoping to contract with a company to handle weekly maintenance, count on paying a good bit more. Buddy's Pool Service, where Brown works, typically charges $3,000 to $3,500 for a season's worth of weekly visits, as well as opening and closing in the spring and fall.

Even contractors agree: Homeowners should buy a pool for fun and enjoyment, not for a financial return. For some, the joy is worth the price.

"For the enjoyment I get out of it, to me it's worth it," said Barbara Mancini, who recently paid about $45,000 to have a pool installed behind her home in Alexandria.

Mancini pulled money from her home equity through a refinance before the market went sour and used the cash to cover the cost. She swims each day at about 6 a.m. She said the work to maintain her pool is neither too costly nor too daunting.

"I test the water, add small chemicals," said Mancini, who uses an ionizer instead of chlorine to keep the pool clean. "And I haven't noticed a tremendous increase in the gas bill. It's the only thing I ever wanted," Mancini said of the pool. "We're nowhere near the ocean, so this is the next best thing. It's like a vacation every day."

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