A hesitant return for home improvement

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By Elizabeth Razzi
Saturday, January 29, 2011

Tentatively - and with price and practicality their top considerations - area homeowners are once again starting to ring up remodeling contractors.

Those pondering a remodel are likely to find a recession-changed landscape. One in which contractors don't turn their nose up at jobs because they're too small. One in which prices are significantly lower than just a few years ago. One in which product deliveries come more slowly. And one in which everyone needs to be concerned, even more than usual, about the financial viability of the companies they deal with.

The homeowners tiptoeing back to the market are changed, too. They're not as free-spending. They take longer to make a commitment. And they're painfully aware that, eventually, future buyers might punish them for choices they don't find appealing.

Following a brutal couple of years for the remodeling business, the leaders of several area remodeling firms said they saw a noticeable uptick in inquiries starting in December, and they're hoping it will carry through into spring.

"It's certainly better than it was last winter, which is setting the bar pretty low. . . . At least for us, that was the worst," said Mark Scott, president of Mark IV Builders in Bethesda.

Josh Baker, founder of Bowa, a remodeling firm based in McLean, said that his high-growth business flattened out during the recession but that the company managed to remain profitable. In December, Bowa fielded a flurry of inquiries from homeowners; calls were up 47 percent from December 2009, Baker said. What he called "quality leads," clients they were working with but who had not yet signed a contract, were at a 20-month high.

Nationally, remodeling expenditures are likely to increase by 3.5 percent each year, adjusted for inflation, over the next five years, according to the Joint Center for Housing Studies of Harvard University. The center points to deferred upkeep during the recession, a normalizing economy and continued population growth due to immigration as reasons for the increase. Also, it said, a large share of the population will enter the peak remodeling years, from the mid-30s to mid-50s, which will boost spending on home improvements.

The Washington area, long one of the nation's biggest spenders on remodeling, is expected to remain among the leaders. Accounting for the D.C. area's spending is a combination of older housing stock and household incomes that can accommodate expensive jobs such as room additions and kitchen overhauls, the center's report says. Area homeowners also are more likely to spring for professional design and installation instead of do-it-yourself projects.

The Joint Center's analysis of census data showed that average annual spending by Washington-area homeowners was $3,600, adjusted for inflation, between 2000 and 2009. (Fueled by hurricane rebuilding, New Orleans homeowners spent the most: $5,700 per household.)

But the D.C. area's cutback in spending during the recession followed the national trend. The Harvard study cites census data showing that homeowners' spending on home improvements fell by more than 23 percent between the market peak in 2007 through 2009.

Chris Landis, an architect and owner of Landis Construction in the District's Takoma area, said the dollar volume of his business dropped 25 percent in 2009 from the year before. It fell another 15 percent in 2010.

Thinking smaller

The recession has changed what consumers are looking for in remodeling.


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