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Remodeling: On the right side of the statistics, for once

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From page C4 | February 22, 2013 | Leave Comment

Generally speaking, I am not a numbers person. That is, I only like statistics when they support what I want to believe: Weight down, bank account up. If they don’t, I pretty much stick a finger in each ear, squeeze my eyes closed and make insect noises.

Thus, for the last four years, I have avoided any real estate news. Hearing the data about how house poor we all were just made me want to dive head first down the garbage disposal.

And that is not becoming.

But this week, as I heard promising rumblings about the home remodeling and sales market, I perked up. I cracked open one eye. Pulled my finger out of one ear, and darn if I didn’t find … now hold onto yourselves … good news.

Reports are showing that the housing market is coming ever-so-slowly back from a four-year coma, and it’s bringing the remodeling market along with it.

Builder confidence is the highest it’s been in 6.5 years, according to the National Association of Home Builders/Wells Fargo survey.

Meanwhile, home construction is nearly 22 percent higher than this time last year, and builders are on track to do more work on homes this year since than they have in the past four.

All this jives with the spring 2013 Remodeling Sentiment Report released this month, a semi-annual report my friend Dan Fritschen has been compiling since 2006.

“I’ll be honest,” I told Fritschen, the force behind remodelormove.com. “I’ve deleted your last few reports without even looking at them because I knew they’d be too depressing.”

“Well, this one you’re going to like,” he promised.

“The influences of the recession are continuing to diminish,” Fritschen said. “The report shows that homeowners are remodeling again, doing bigger projects and even hiring more contractors than they have since the recession started.”

Plus, because builders are eager to get back to work, many are cutting deals.

Cue up the angels chorus. The positive news is particularly timely for me as I am on the verge of remodeling my parents’ old home, prettying it up for a spring sale.

For once in my life, I may have timed a home remodel right.

To take the pulse of the remodeling industry, Fritschen’s company surveys 5,000 homeowners who are planning to remodel in the coming year. He asks how much they plan to spend, what rooms they plan to tackle, and whether they will do all, some or none of the work themselves.

Here’s the good news from the 2013 Remodeling Sentiment Report:

  • More confidence. When economic confidence hit a low in 2009, 67 percent of  homeowners planning a remodel said they were curtailing their plans. This year only 42 percent said the economy was holding them back. The rest said the economy was not having an impact.
  • Spending more. The scope and planned spending of home improvement projects are also on the rise. In 2010, the homeowners said they planned to remodel or add on 2.6 rooms, and spend an average of $80,000. Now they plan to makeover or add 3.6 rooms, and spend an estimated $114,000.
  • More hired help. The number of homeowners planning to hire a general contractor for their project was also up from 64 percent in 2010, to 73 percent. The trend, said Fritschen, is “another sign the recession is losing steam.”
  • Higher end first. Those at the higher end of the market are leading the charge. More affluent homeowners are “the first ones pulling the trigger,” he said. They are releasing a pent-up demand for remodeling projects they’ve put on hold. “The actions of the more affluent are a bellwether for middle and lower income homeowners. They will follow as confidence improves, over the next six to 12 months, and do more of the work themselves.
  • The wealth effect. After bottoming out, the value of existing and new homes is coming back, in some areas rapidly, said Fritschen. That uptick in home equity translates into more optimism about remodeling. The average reported home equity was $130,000 – the highest since 2009, said Fritschen. Among those surveyed, the average home value was $306,000.
  • Kitchens and baths. These rooms tie for the most popular remodeling projects: 57 percent of homeowners said at least one of these rooms was part of their remodeling plan.
  • Fixing the distressed. Although Fritschen believes most remodelers today are fixing up homes for their personal enjoyment, now is a great time to fix up a distressed property. The market is coming back, interest rates are low, workers are making great deals, and materials are readily available for a good price. Those are exactly the kinds of facts I want to hear.

Syndicated columnist and speaker Marni Jameson is the author of “House of Havoc” and “The House Always Wins” (Da Capo Press). Contact her through marnijameson.com.

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