ANDREW LaSALA JR. – Remodeling ‘very brisk’
Homeowners across the country spent an estimated $129.3 billion on improvements and repairs over the past four quarters, according to recent research by Harvard University’s Joint Center for Housing Studies.
Spending on home improvements rose 5.1 percent during the third quarter of the year from the same period in 2003, as job growth and low interest rates continued to facilitate homeowner spending on home improvements, according to the center.
Remodelers in Connecticut aren’t surprised that home improvement activity is growing. Several remodelers recently interviewed by The Commercial Record say they have yet to see a slowdown in remodeling activity.
“It’s [remodeling] very brisk,” said Andrew LaSala Jr., who serves as the first vice president of the Home Builders & Remodelers Association of Fairfield County.
LaSala, who owns Cannondale Building and Design in Wilton and primarily works in southern Fairfield County and New York’s Westchester County, said he is receiving numerous calls from homeowners who are interested in large remodeling projects.
Recently, LaSala received a call from a homeowner who wanted to rip out a 5-year-old kitchen and completely replace it with a new one. One of the projects his company is currently working on is a $1 million home renovation.
LaSala believes that part of the reason that remodeling continues to remain strong is because “there aren’t a lot of good investment opportunities out there.”
“Certainly people believe that real estate is their best dollar-for-dollar investment right now,” said LaSala, whose company recently won awards for best kitchen remodeling and best room addition from the Home Builders Association of Connecticut.
‘Nesting’ Trend
Some industry watchers contend that many Americans may still be experiencing the “nesting” phenomenon that emerged in the months following the terrorist attacks of Sept. 11, 2001. Reluctant to travel after the attacks and staying close to home instead of vacationing at faraway destinations, many homeowners allowed their nesting instincts to kick in; subsequently they have put a considerable amount of time and resources into improving their residences, according to some experts.
Low interest rates for short-term borrowing and home equity loans also have helped fuel the remodeling industry in the last two to three years.
And some industry groups are predicting that spending on remodeling will continue to grow in the future.
In a report entitled “Measuring the Benefits of Home Remodeling” by Harvard’s Joint Center, it is noted that rising homeownership rates and the nation’s aging housing stock will continue to spur growth in remodeling expenditures over the coming decade.
“Over the coming decade, the average age of the U.S. housing stock will continue to drift upward, in part because of the slowdown in new construction during the 1980s and early 1990s and in part because of recent efforts to preserve older homes. Owners of older homes spend more on improvements than owners of newer homes, regardless of their household characteristics. As a result, overall home improvement will continue to climb,” according to the report.
The National Association of Home Builders reported in August that professional remodeling activity kept up a brisk pace during the second quarter of the year. Remodeling activity nationwide actually dipped slightly during the second quarter compared to the first quarter of the year, according to the NAHB Remodeling Market Index. But a year-to-year comparison showed that second-quarter results fell in line with the pace set in 2003. The Remodeling Market Index, or RMI, is based on a quarterly survey of professional remodelers.
Neither the National Association of the Remodeling Industry nor the Home Builders Association of Connecticut could provide statistics on how much money is spent on home remodeling in Connecticut.
In southeastern Connecticut, John DeCiantis’ business has been consistently strong even during the economic downturn. DeCiantis, who owns DeCiantis Construction in Stonington and primarily works on residential remodeling projects, said many of his clients are second-home owners and retirees who are spending “big dollars to bring the homes up to their liking.”
DeCiantis’ company is currently renovating a large waterfront home to make it accessible for an elderly parent. For another home, DeCiantis’ company is adding an outdoor kitchen and bar as well as a sunroom with hot tub.
Today’s consumers are much more careful and interested in what they’re spending money on, according to DeCiantis and other remodelers interviewed by The Commercial Record. Many consumers are turning to the Internet for guidance and information.
Even as consumers have become more savvy and demanding, the industry itself has evolved. LaSala, the Wilton remodeler, said there has been an emergence of “more qualified and professional remodelers” who specialize in the design/build process in recent years.
In an article he wrote last year for a trade magazine, remodeler Peter McLoughlin noted that remodeling in New England is now overtaking new-home construction in terms of dollars spent.
McLoughlin, owner of CFR Construction in Newtown and chairman of the Home Builders & Remodelers Association of Fairfield County’s Remodelers Council, said 2004 has so far “been the best year in 24 years” that he’s been in business.
Like LaSala, McLoughlin partly attributes the strength of the remodeling industry to the fact that typical investments, like the stock market, haven’t yielded tremendous results for consumers recently. Many consumers instead have decided to take advantage of the low interest rates and spend money on their properties, knowing full well that the return on their investment would be there.
Another factor aiding remodeling is that it’s tough to find land to build new homes, and some homeowners are finding that it’s too expensive to buy a new residence when they’ve outgrown their current one, McLoughlin said. So, instead of trading up for a larger house, they’re choosing to renovate their current homes.
Home remodelers in Connecticut say that kitchen and bathroom remodeling projects continue to be popular. But many homeowners also are choosing to improve outdoor living space and add high-tech media centers, libraries and computer dens.
