Published: April 23, 2010
TAMPA - Jeanine Frederick has been waiting for nearly two years on her dream kitchen. her home recently sold and now the family is building a new one.
"I'm picking out kitchen cabinets, making selections on door styles and finishes," she said during a recent afternoon shopping trip to Home Depot. "It's refreshing."
Frederick isn't the only one pumping money into the building and remodeling industry. Homeowners who held back on projects because of the sluggish economy are moving forward now.
Some are going big, like Frederick, and tackling large projects such as kitchens, bathrooms and room additions. others are opting for smaller projects that spruce up their homes without having to fork over a lot of cash. They're going for new faucets, light fixtures, ceiling fans or just a new paint color.
This year is expected to be the first annual spending increase for the remodeling industry since 2006, according to the first quarterly report by the Joint Center for Housing Studies of Harvard University.
To Florida's construction industry, which has lost the most jobs during the recession, such projections are welcome news. while remodeling won't bring jobs back in full, it's a start.
The Harvard report looks only at projects on primary homes. School researchers predict consumer spending on remodeling projects to reach $121.5 billion in 2010, compared to $115.8 billion in 2009. At the industry's peak in 2006 remodeling spending hit $144.0 billion.
"People cut back on spending over the past couple of years and cut out discretionary projects," said Abbe Will, a research assistant who worked on the Harvard report. "Now that the housing market is improving, consumer confidence is improving."
During the boom years, homeowners cashed in on their equity, borrowing against their homes and using the money for renovations. Those days are gone as home values plummeted, and most homeowners no longer have equity to tap.
Remodeling dropped off in late 2007 and has been falling since. during the economic downturn, many couldn't afford to improve their homes. Home sales dropped and foreclosures skyrocketed.
Homeowners who owe more than properties are worth are increasingly accepting reality and deciding to remodel instead of buying a new home, Will said.
Many that are buying homes are using federal tax credits of up to $8,000 to spruce up their homes. They're adding screened rooms, fences and replacing carpet.
Companies from Home Depot and Lowe's to local remodeling companies say business has dramatically picked up over the past couple of months.
Both home improvement super giants said they've noticed a recent increase in homeowners hiring them to do their projects. But they've also noticed more people tying get the most bang for their buck.
"They're doing things they can do themselves," said Craig Fishel, a spokesman for Home Depot. "They're tiling kitchen and bathroom floors and adding tile backsplashes."
Max Maraj, of Alexander Inc. of Tampa Bay, said he's noticed a big change in the past 30 days.
"People can't sell for what they need to sell for, so they want to make their homes better," he said. "Last year, we had a lot of lookers, people kicking the tires. now, people are ready to do it."
One client, for example, has a 1,500 square-foot home in south Tampa. With a baby on the way, they want a larger home. In a better housing market, they might sell and buy a new house, but they've decided instead to add onto the house.
Maraj thinks more people would opt for big projects if they could get financing. he advises those seeking dramatic changes to add square footage to the home. Adding square footage, he said, adds value to the home. Lenders, he said, are more likely to grant a loan if the improvement will build equity.
"It's better for your value to add a master bedroom then a new kitchen," he said. "The kitchen will improve the sellability of the house, but not the value."
Jack Paulo, of Apollo Aluminum, said his clients say they're tired of looking at unsightly back yards. if they have to stay put in their homes, he said, they want to enjoy them more.
"You have to look at that yard everyday," he said.
Chris Ares, operations manager for American Countertop, said first quarter sales were up 40 percent, compared to the first quarter last year.
"We've been thinking the tax credit would be a major factor," Ares said. "People don't say how they're paying for their countertops, but more people are coming through our doors."
Reporter Shannon Behnken can be reached at (813) 259-7804.