Remodeling Redux

Staff Writer
Columbus CEO

It may be the ultimate understatement to say that the last few years haven’t been kind to the real estate market. Home prices have fallen—in some cases dramatically—and houses that once would have been snatched up the day they went on the market are sitting unsold for weeks, months and sometimes years.

The downtown has had a ripple effect through the industries and businesses closely tied to real estate, including the remodeling industry.

Jeffrey Brown, president of J.S. Brown & Company, has been in the remodeling business for 34 years and says this downturn follows a familiar script. “In remodeling, one of the first things that happens is that the average job size goes down,” he says.

The jobs Brown does now are about 25 percent to 30 percent the size of projects undertaken three or four years ago. “We’ve stayed busy the whole time, and the last couple of years have been some of the best years, bottom line,” he says. “But we’ve done less volume.”

Clients also are much more focused on their own bottom line, Brown says. “I think that people are cautious about how they’re spending their dollars. They are holding on to those dollars and making sure they’re getting the most from them. They are caring about quality with every step. It’s noticeable.”

Smaller jobs have kept many remodelers busy, says George Cleary, owner of the Cleary Company. “Projects are definitely smaller in size, but the projects are out there,” he says. “We’ve been busy throughout the whole recession, fortunately for us.”

These downsized remodeling jobs reflect the changed times. “You sense they’re a little more grounded because of all we’ve been through,” Cleary says of his clients.

‘Too Good to Be True’

A large part of that grounding is rooted in the state of the residential real estate market. People are coming to terms with the fact that the market isn’t going to make a full recovery anytime soon, says Bryce Jacob, vice president at Dave Fox Design Build Remodelers.

“More people are accepting that they aren’t going to get the kind of return that they would plan to in the past,” he says. “It was too good to be true when it was happening and now the reality is sinking in.”

As an example, Jacob notes people used to say that they didn’t want to “over improve” their home for the neighborhood because they wouldn’t be able to recoup the cost. He doesn’t hear that from customers anymore. Instead, they talk about the need to make improvements to improve their lives. “They are emotionally more attached to the need for doing it, rather than as a return on investment,” he says.

This isn’t a bad approach to remodeling, Jacob says. He compares improving a home to going on a vacation. No one, he says, goes on vacation and expects a return on investment. “It’s not like you sell those memories to someone later. But you don’t stop going on vacation. You still go.”

Because people are remodeling for themselves, they are making changes they might not have made before, says Justin Collamore, owner of Collamore Built Residential Design and Construction. “In my company’s history, they were thinking about reselling all the time. If they were remodeling, they were making everything beige to make it easier to resell,” he says. “Now they are doing more personalization because they are staying there longer. They’re tailoring them more to their tastes.”

The trend toward individual creativity also has been noticed by Marc Gliatas, owner of Gliatas Construction. “You don’t see as much white paint going up anymore,” he says. “They are using color and accent in their backsplash tiles. In their bathrooms, they are making color statements.”

Gliatas says the home improvement network HGTV, with its various decorating, home design and real estate shows, is having an impact as well. “There are a lot more things happening, design-wise, with bolder colors. I think people are seeing that and liking that.”

Preparing for the Future

The desire—or necessity—to stay put is also influencing remodeling trends in another way. There is a lot more interest in the “aging in place” approach to home makeovers, Cleary says, especially among clients age 40 and up. Aging in place means adding features to a home that make it amenable to continued occupancy as the owners get older.

“When we consider a remodel, we consider whether [changes] make sense today as well as tomorrow,” Cleary says. “If your life changes, is your home still going to be accessible to someone in a wheelchair or a walker, for example?”

There are a lot of options homeowners are considering. When remodeling a kitchen, they may look at designs that make countertops accessible to someone in a wheelchair. Appliance placement is also important. It might be a better idea to locate a microwave oven under the countertop in a kitchen island, where it’s easy to reach, than above the stove.

Easily accessible bathrooms, showers and sinks are other possible changes, Cleary says. Benches in the shower might also be useful, as might a pedestal sink that a person in a wheelchair could roll under.

“Future proofing” a house doesn’t automatically make it look like a senior citizen’s home. The changes can be subtle, or even transparent. For example, when remodeling a shower, a homeowner could install supports behind the wall for future grab bars. They remain invisible until they are needed, and then a bar could be added with minimal effort.

“The great thing about today is that we have so many options out there that we can do these kind of designs without making it look like a handicapped-accessible bathroom,” Cleary says.

The fact that so many people are looking at aging-in-place options is an indication that people see moving as a less viable option than they used to, Cleary says. “It’s something we feel our clients lately, through this whole recessionary period, are thinking,” he says. “People are thinking that this is where we’re going to be for our foreseeable future.”

In some cases, the homeowner might even change the basic floor plan to make it more amenable to long-term occupancy. “We’re doing a first-floor master suite so that a couple can stay in their current house as they get older and not have to worry about having to run up and down the stairs all the time,” says Collamore. “Before, if they needed an extra bedroom [downstairs] they would sell their house and buy a new house.”

Some people are making changes to plan for their future financial health as well as their physical health. “We had one project last year where we made a basement apartment unit as part of the project,” Collamore says. “They could stay in their house, and they rented [the basement apartment] out as part of their income. It’s part of their planning—they have this source of income when they retire. They could also use it for a live-in helper. It’s planning for flexibility, really.”

A Master Plan

Another way remodeling has changed is that more homeowners are developing “master plans” for work they want done in their home. These plans break the desired outcome into multiple phases taking place over many years, rather than as one large project.

Todd Schmidt, president of Renovations Unlimited, says he’s working with a family that has divided a project into three phases. They started by remodeling the first floor, including the kitchen, family room, powder room and mudroom. The second phase covers the master suite, and the final phase revamps the upstairs hall bathroom and the remaining bedrooms.

Unlike a simple phased approach, a master plan includes a formal document that lists, from the beginning, the major changes planned for the home. “By doing that, you can prepare for the second phase, but you don’t have to financially extend yourself to do it all at once,” Schmidt says. “It’s typically more expensive, but it also allows the clients to stay in the house as the work goes on.”

The master plan is created solely for the benefit of the remodeler and the homeowner—actual construction documents and permits are drawn up only for the particular phase that’s under way.

The main advantage of a master plan is that changes can be made in preparation of changes to come. During the first phase of Schmidt’s three-phase project, his company extended existing electrical and plumbing lines through the house that will be used in phases two and three.

“When we go to the second and third floor, we know where the toilets are going to go, we knew where the vanity is going to go, so we didn’t have to pull things up on the first floor later,” he says. “You can make changes without destroying what you just finished.”

Schmidt had worked on master plans before the economic downturn arrived, but says they’re more common now: “It’s definitely something you’re seeing more of.”

Subtracting Additions

The shift in remodeling trends has brought other significant changes. Increasingly, homeowners are keeping projects within the footprint of the home, Jacob says, rather than adding square footage.

“We’re combining kitchens and family rooms, or kitchens and dining rooms,” he says. Clients often want to get away from the traditional compartmentalized floor plans found in older homes, but don’t necessarily want bigger homes.

“As society has changed and the way that we raise our families have changed, the space is changing, too,” Jacob says. “Families want to see each other rather than be broken up when they’re in the home.”

Another common target for remodeling is the basement, he says. “I think one of the reasons we’re seeing basements being done is that you can add living space to the home, without adding extra space to the footprint.”

Brown says he’s seen a similar trend, although he notes that additions haven’t disappeared entirely. “We’re still seeing additions, but we’re not doubling the size of homes like we were four years ago,” he says.

One place homeowners are creating new space is in the great outdoors, says Gliatas. Decks, expanded outdoor patios and cooking areas are all popular, he says.

“We’re looking at one right now where we’re reducing their deck size, but adding a paver patio, and part of it is being covered with a pavilion so they can use it when it’s raining or the sun is beating down,” he says. “I think people are realizing that if they expand outside, they can gain some living space. And in Ohio, with our weather, you can get a lot of use out of that space. You have quite a few months where you can use it.”

Options include fire pits, outdoor cooking areas with permanent cooktops and refrigerators, storage and more. Many people also are installing high-end audio and lighting systems.

“We’re seeing an awful lot of people wanting to make outside a ‘staycation’ area,” Gliatas says. “They can go out and feel like they’re in another world.”

Moving Forward

Whatever the nature of the home remodeling project, Gliatas says clients are more cost-conscious. That doesn’t mean they’re always going with the cheapest option, but they are determined to get the most for their money.

“They’re looking at quality projects still, but they’re looking at better-priced items,” he says. “They’re looking at cutting them back in costs, not being as frivolous as they were in years past. Everyone is holding on to that dollar a little tighter. They still want the quality products , though.”

The shift in consumers’ finances, focus and attitudes is something Cleary sees reflected in his own company. “I think we’ve changed and grown a lot in the past several years,” he says. “We don’t turn away work. We will work at smaller projects because we look at it as an opportunity to get our foot in the door.”

Like his customers, Cleary is thinking long-term. “When they get their confidence back, and they get an opportunity to do another project, they will go with who they trust and who they’ve had a good experience with. We just know that we run a well-oiled machine and, if we can get ourselves in front of the client and show what we can do, they will become a client for life. Most of our clients are repeat clients.”

Collamore says it seemed as if people were in a holding pattern for a while, but things are starting to change. He says the end of 2009 and 2010 were a rough time for his business. Last year was better, and 2012 seems to be stronger still. “This is the busiest January and February we’ve ever had,” he says. “I think that people are making up their mind that the world isn’t going to end. I think there were a lot of people putting things off, but they’re starting to move forward again.”

Lawrence Houck is a freelance writer.

Reprinted from the April 2012 issue of Columbus C.E.O. Copyright © Columbus C.E.O.