Consumer Corner: Home remodeling picking up as the economy improves

By MARCELLA S. KREITER  |  April 25, 2010 at 6:30 AM
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CHICAGO, April 23 (UPI) -- Optimism is finally taking hold in the U.S. home remodeling business and contractors are hoping it's not a "false blip."

"There's a lot of pent-up demand," said David Lupberger, a home improvement expert with of Golden, Colo. "People who couldn't sell their homes are now starting to ask for these projects."

Lupberger, who was in Chicago for the Kitchen & Bath Industry Show earlier this month, says with the economy picking up the trend for small jobs like kitchen counter replacement or cabinet refacing have morphed into full-blown remodeling jobs.

"Let's hope this isn't a false blip," Lupberger said. "What the economy means is consumers' level of confidence -- it's a fragile thing. What we're seeing is people saying, 'I'm not going to hold back anymore.'"

He may be right. The most recent Commerce Department report showed housing starts for March up 1.6 percent from February and a whopping 20.2 percent above March 2009, with new home sales up 27 percent. Permits were up 34.1 percent from last year. And the National Association of Realtors reported sales of existing homes rose 6.8 percent.

A Gallup poll found 72 percent of Americans think housing prices have stabilized or are rising, making it a good time to buy.

Before the recession hit 18 months ago and the real estate bubble burst, the home remodeling industry was approaching $200 billion a year, bigger than the new-home building industry, Lupberger said. With the recession, Lupberger estimates the industry shrank about 25 percent and made consumers much more savvy in choosing a contractor, often seeking four or five estimates.

"We're finding a significant increase focused on kitchen and bath (remodeling), with kitchen remodels up more than 191 percent and additions and remodels up 49 percent over last year's (first quarter)," Lupberger said in remarks at the Kitchen and Bath show. "With huge spikes in additions and remodels across the Northeast, Midwest and Great Plains, the economic climate of January, February and March 2010 drove homeowners to renew their most commonly used rooms."

Lupberger said remodelers are in the vanguard of home design, with new-home builders often getting their ideas from what people want done to existing structures.

"Remember how there used to be formal dining rooms?" Lupberger asked. "They've pretty much gone away. Now you have great rooms and rooms where the kitchen and informal living spaces come together. Remodelers have been working with designers, working on the cutting edge.

"Things happen with remodels first. Then they begin to integrate into new home design."

The hardest part of home remodeling is hooking up with a contractor with whom the consumer can communicate and develop trust.

"Consumers have only one way to compare and distinguish different building contractors -- price," said Lupberger, a former contractor himself. "It's up to the contractor to distinguish what you're getting and provide a level of supervision."

Redoing the kitchen remains the top remodeling choice -- and the best investment -- but Lupberger said he doesn't think people remodel a kitchen or bath more than once, largely because of the expense and disruption.

"Building contractors have fallen down on managing the experience," he said.

Lupberger has written a book, "Managing the Emotional Homeowner," to help contractors learn to manage the emotional experience remodeling puts a consumer through. The book also guides the consumer through the remodeling process.

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