Part of an occasional series.
These are boom times for remodelers.
Fueled by rising home equity and pent-up desires, homeowners are investing heavily in new kitchens and bathrooms. Instead of moving, they’re staying put and remaking homes into dream houses where they expect to live many more years. Especially in California, rapidly rising home prices – and values – make remodeling often a better option than buying another house.
Recent home buyers also are plunging big bucks into remodeling and now account for one in four projects. They tend to spend more and are three times more likely to tackle whole-house projects than longtime homeowners do, according to national home renovation experts Houzz.
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“It’s a really good sign of consumer confidence,” said Nino Sitchinava, Houzz’s principal economist. “In general, we’re seeing a lot more luxury features, especially in bathrooms. People want room for two in bathtubs and showers, and dual sinks in the vanity. They want a spa experience and more space.”
And now, people have the time as well as the money to get work done, she added. “Home renovations usually come down to finally having the finances to do it. Now, time trumps finances. People are saying they no longer can stand their bathrooms and they’re doing something about it.”
Kathleen Jennison, owner of KTJ Design Co. in Stockton, agrees. “People love their homes, but they’re outdated,” she said. “They want a new look, but don’t want to move. That some day (to do something) has finally come.”
This is peak home remodeling season, with many contractors backed up for weeks. According to a new survey by the Home Improvement Research Institute, seven out of 10 homeowners plan at least one home improvement during the next three months.
“Absolutely, it seems like all our members are super crazy busy,” said Tracey Booth, executive director of the Greater Sacramento chapter of the National Association of the Remodeling Industry (NARI). “Homeowners are doing a lot of remodeling – which is fantastic. A stable housing market has really helped the remodeling industry. People are feeling more confident and are ready to enjoy their homes again.”
Nearing $350 billion this year, home improvement spending already is at an all-time high, experts say. That spending was spurred by a doubling of home equity since the Great Recession. The average homeowner now has about $167,000 in home equity, the Federal Reserve estimates. They’re reinvesting some of that equity into updating their homes.
“We’re seeing more people staying put,” said Tim Shigley, national remodelers chairman for the National Association of Home Builders, which includes more than 50,000 remodelers nationwide. “Remodeling has become a big part of the whole home building industry. We’re expecting to see a 20 percent increase (in remodeling projects) over last year.”
Boomers tend to be leading this building boom, Shigley noted. “They’re looking 20 years down the road, updating their homes so they can age in place,” he said, with such modifications as roll-in showers and hand-held shower heads. “The biggest thing: They’re making a commitment to their house.”
Kitchens, bathrooms and family rooms, in that order, still rank as the most popular remodeling projects. For recent home buyers, kitchen makeovers are a top priority, accounting for 41 percent of projects.
How much will remodels cost? Nationally, kitchen remodels average $19,935, according to HomeAdvisor, a web-based service for home improvement professionals and services. That average kitchen spend is much more in major California cities, topped by $30,815 in Los Angeles.
In its study, Houzz pegged national averages even higher: $56,900 for a full kitchen remodel over 200 square feet, $31,600 for a kitchen under 200 square feet. Bathroom makeovers average $16,600 under 100 square feet, $31,000 above 100 square feet, Sitchinava said.
Spending is up, but so are costs, say remodelers. While the average spend on a new kitchen or bathroom went up 12 percent in 2015, the costs of materials and labor are rising along with demand.
“This is very similar to 2005, when subcontractors were very, very busy,” said Harry Headrick of Expert Design and Construction in Rancho Cordova. “Prices are going up on labor and materials. Lead times are extending. A lot of (remodelers) are putting people off for two or three months.”
That’s partly the result of a shortage of experienced subcontractors and craftspeople, Headrick noted. “Prices are going up because of a lack of labor. When the economy was way down in 2008, 53 percent of all remodelers went out of business. We lost thousands and thousands of tradespeople and they didn’t come back. It takes a really good journeyman four, five years to learn his craft. If you don’t have a good team of subcontractors, you’re in trouble.”
Jennison has seen long lag times on some projects. “Things do take a long time,” she said. “It can be a good nine months from the first call to the finished project. The hardest part is making decisions about what you want.”
Current kitchen and bathroom remodeling trends, according to the experts:
Color: Gray and earth tones dominate. “The hottest color is gray,” said Harry Headrick of Expert Design and Construction. “We’ve done several gray kitchens and bathrooms this year.” For cabinets, classic white has made a big comeback.
Flooring: The wood look is in, but it’s not necessarily wood. Luxury vinyl plank flooring looks like wood, but resists moisture; a plus in kitchens and bathrooms. In baths, wood-look ceramic tile also is hot.
Tile: Large-format tiles – such as 2 by 2 feet – continue to be popular. So are mosaic, glass and stone accents. “Subway tiles are still a classic,” said Kathleen Jennison of KTJ Design Co., “but we’re also seeing geometric variations such as diamonds.”
Countertops: Engineered quartz and solid surfaces that look like marble or granite (but are easier to maintain) are becoming the norm.
Appliances: Stainless steel accounts for three out of every four new appliances. White is now only 10 percent, the same as black. “Black stainless steel looks really sleek and cool,” Jennison said. “It has that Batman feel.”
Extras: LED lighting everywhere, especially under cabinets. Wine refrigerators have become a must-have appliance. Specialized nooks (recycling, baking station, computer space, etc.) are popular built-in upgrades.