This is an article that ran on the front cover of the Oakland Tribune, San Jose Mercury News and Contra Costa times this morning, March 2, 2012. HDR Remodeling is one of the featured companies interviewed in the article.
In another sign of an improving economy, residential remodeling is picking up in the Bay Area after several lean years, helped along by homeowners who are deciding to fix up places they can’t sell because of the housing crunch.
“There is an awakening,” said Rick Evans of Bauman Builders in San Jose. Last year “was like a switch that flipped.”
Fueling the upward trend is growing confidence in job stability and a booming tech stock market that helps pay for new kitchens, bathrooms and landscaping. Few homeowners are borrowing for the work, builders say.
“It’s all cash, nobody’s borrowing anything. It’s savings or stock money,” Evans said. He said his clients “are employed someplace in the tech sector —
The Bay Area and coastal cities up and down the state are having what is “among their better years in the last five,” said Mike Winn of the California Building Industry Association.
Jennifer and Julien Schreyer are remodeling the kitchen of their Oakland home, paying cash from savings and investments for the job.
“The economy is getting a little bit more stable, we are feeling a little more secure, and the stock market is going up a little so we could sell some stock,” said Jennifer Schreyer, a real estate agent whose husband works for Pixar. “The economy had a lot to do with it.”
The Schreyers have been waiting for the right time to redo the kitchen of the home they bought seven years ago. “It was a little scary to take those steps to do something substantial,” Jennifer Schreyer said, but a new kitchen was a lifestyle essential. “I love to cook; my husband is French; our two boys were born in Paris, and they love to cook.”
Jim Tibbs of HDR Remodeling in Berkeley, which is doing the Schreyers’ kitchen, said some of his clients are remodeling instead of moving up. “People seem to be staying in their homes longer, opting for improving the home they’re already in as opposed to selling and taking on a heavier mortgage at a larger home,” he said.
The National Association of Home Builders forecasts that residential remodeling expenditures for owner-occupied improvements will increase nationally by 8.9 percent in 2012 and a further 11.4 percent in 2013. Of the U.S. counties with the highest estimated spending per home, California has five of the top 10 spots: Marin, San Francisco, San Mateo, Santa Clara and Santa Cruz. An index of remodeling contractors’ confidence is at its highest level in five years, according to the association.
The jobs are going to the last contractors standing, after a punishing three or four years in which the construction business throughout the Bay Area drastically slowed during the recession and its aftermath.
Doug Brown of Home Remodelers Contracting in Dublin had to trim office staff to survive the worst of the downturn. Brown said his design and build company, which has been in business for two decades in the Bay Area, has seen walk-in traffic slow sharply at his headquarters near Interstate 680. Still, business is pretty good in the South Bay for the firm. “Right now we just finished a 1,100-foot addition in Mountain View; we’re working on an Eichler home in Sunnyvale; and will soon be starting a new addition and kitchen in San Jose.”
Vickie Feeman, a lawyer, is doing a major remodel of her Palo Alto home, gutting parts of the interior, moving walls, putting in arched doorways and giving the 1920-30s house a Mediterranean feel.
“We are seeing a renewed interest” in remodeling projects, said Ciro Giammona, president of Harrell Remodeling in Mountain View, which is doing the job. “I think people are giving themselves permission to take the leap. The uncertainty is starting to clear a little.”
But a lot of homeowners are spending more cautiously than they were before the crash, said NAHB economist Stephen Melman. “The projects aren’t quite as robust. They’re looking for value versus the big-ticket projects during the boom.”
“Instead of a whole new $150,000 kitchen, people will replace appliances and refurbish cabinets. They’re more likely to do the bathroom than kitchen because it’s less expensive,” Melman said.
R&R Development of San Jose, which has seen business increase in the past few months, is starting on an outdoor kitchen for Donna Hecke’s Almaden home in San Jose. Hecke and her husband, who works in high tech, have been remodeling their home a little bit at a time, saving up the money for each project. “We don’t do anything until we have the money saved,” she said.