Rather than buying a new house, more people are investing in remodeling the house they have.
By BENITA D. NEWTON
Published October 31, 2003
[Times photo: James Borchuck]
Tina Turner and her husband, Jim, have spent the past eight years remodeling their Treasure Island home. They've spent $236,000 to improve the home they spent $190,000 for in 1995.
Does it pay to remodel?
Remodeling Online surveyed Tampa Bay area remodelers and real estate agents on the costs and rewards of projects in a 2002 study.
After one year
Job cost
Resale value
Cost recouped
Siding replacement
$7,015.00
$13,629.00
194.3%
Bathroom addition*
$11,729.00
$10,000.00
85.3%
Family room addition*
$43,416.00
$24,250.00
55.9%
Master suite addition*
$55,775.00
$32,500.00
58.3%
Kitchen remodel*
$38,794.00
$23,400.00
60.3%
* Mid-range project
Times art
Jim and Tina Turner liked the Treasure Island house they saw during a Parade of Homes tour so much that they put down a deposit that day.
They just wanted to add a few small things. New cabinets in a bathroom. Crown moulding in a bedroom.
A few more things came later. A new kitchen. A pool, fountain and deck. A new master bedroom and bath.
Eight years and $236,500 later, they consider the house almost perfect. But they're not through yet.
"We're going to retire here," Jim Turner said, "so we want it to be our dream home."
The Turners are among a growing breed of homeowners that some in the home improvement business have called "serial remodelers."
They're one reason home improvement has become "the great American pastime," as a report this year by the Joint Center for Housing Studies at Harvard University put it. At $165-billion in spending last year, the report said, home improvement, maintenance and repairs have outpaced major industries such as legal services and commercial and public works construction.
For the year ended in September, home improvement expenditures increased by 6.6 percent over the previous year, according to the Joint Center. Homeowners converted an estimated $180.2-billion in home equity into cash in 2001-02, and they funneled more than a third of that into renovations. Tampa Bay area homeowners spent an average of $1,190 on home improvement between 1990 and 1999, although that figure encompasses both those who tinkered little and those who took on major projects.
Spurred by record low interest rates that only recently began to rise, soaring property values and new options for interiors, homeowners are knocking down walls, ripping up tile and gutting out kitchens with abandon.
Those in the home improvement industry are happily scrambling to keep up. Alba Greiner said business was so bad after Sept.11 at her Largo company, Tile Supply & Design, that her husband had to commute to Texas for work. But over the past year, the remodeling trend has helped them turn the business around.
"It's bringing in a lot more money, and it's helping us get exposed out there more," Greiner said.
At Henry Kyle Room Additions and Remodeling, annual revenue increased nearly 100 percent in 2002, and by about 50 percent the year before that, said manager Bobby Elder. The Largo business is projecting revenues of $6-million this year as it expands into Hillsborough County.
Elder said many urban neighborhoods of the Tampa Bay area are ripe for the remodeling craze because there's little space to build new homes and prices for existing homes are so high that people would rather fix up what they already own. The median sales price for existing homes in the bay area was $148,000 in September, a 9 percent jump from last year, according to the National Association of Realtors.
"More and more people want to keep their houses, and they're living in their homes longer than they used to," Elder said. "The way property values have gone up in the last three or four years, people know that if they spend $15,000 to remodel a kitchen, they're going to get the money back."
The value of the Turner's home has more than tripled. They bought the house in 1995 for $190,000. Add to that the $236,500 they spent improving it. It was recently appraised at $618,000, a 45 percent increase over their total investment.
But a return on investment is not always a given. Experts say homeowners should contemplate if and when they plan to sell the home and stay away from uber-trendy or quirky personal styles that may be unappealing to potential buyers later.
William Voorheis, president of Your Home Dreams in Largo, said more people are going for classical styles.
"They know that if they get something too faddish and they want to sell the home in a few years, the market may not be there," Voorheis said.
Voorheis said the slowly improving economy has encouraged people to stop putting off projects, and as interest rates continue to rise, he expects home improvement to get even hotter as an alternative to moving to a new house and mortgage.
"This year around June 1, it was like somebody flipped a switch," Voorheis said. "We've been busier than the dickens, and we still have a lot of quotes out there."
Voorheis said his customers are pouring money into their homes at much younger ages, too.
"Younger people are doing major remodeling projects, at an age where people used to be still struggling raising kids," Voorheis said. "Everyone seems anxious to not get left out."
Besides, unsettled world events make it difficult or unappealing to travel.
"People are spending more time at home," Voorheis said. "They figure, "If I'm going to be here, I want it to look nice.' "
