Wednesday, January 17, 2018
Business

The Nation's Housing: Owners remodel instead of moving

Owners remodel instead of moving

WASHINGTON — According to federal estimates, by late 2011 the annualized dollar value of expenditures on renovations outstripped expenditures on newly constructed single-family homes — a huge change from prerecession years, when the ratio was sometimes 3-to-1 in favor of new construction.

Underscoring this trend: In January, the National Association of Home Builders' remodeling market index hit its highest level in five years. It's not that remodeling is moving into boom territory, said David Crowe, chief economist of the association, but rather that for many consumers, fixing up their house now fits their sentiments — and their finances — better than selling or buying.

Interviews with builders and remodelers in different parts of the country point to important changes in homeowner strategies. In Seattle, Joe McKinstry, president of Joseph McKinstry Construction Co., says inquiries about possible remodeling projects have nearly tripled in the past 12 months. "I feel like people are starting to say, 'Well, we're not going to move anytime soon because, if we do, we're going to get 30 percent less than the house is worth. Why don't we do something in the kitchen or bathroom for our own enjoyment, since we're not going anywhere real soon?' "

Generally the projects that people want to do are no longer on the grand scale, but smaller, more modest, less costly efforts than five to seven years ago, with more emphasis on finishing details and quality than square footage. "Now (owners) are being much more judicious about how they spend their money," said McKinstry.

Bob Peterson, chief executive of ABD Design/Build in Fort Collins, Colo., also is seeing a significant jump in interest in renovating, especially from owners who have been in their houses for years, have built up some savings and managed to get through the recession without falling behind on their mortgages. The average project that Peterson's firm is doing now costs about $45,000.

Bruce Case, president of Case Design/Remodeling of Bethesda, Md., agrees that because of high underwriting hurdles in the mortgage market, the majority of his remodeling clients are tapping savings, retirement accounts, liquidating securities and the like. But 20 percent of his firm's dollar volume still involves some form of financing.

Case says local and regional banks and credit unions are increasingly important sources. They tend to know the local real estate environment better and "are willing to look at (applications) more holistically."

Some clients are successfully using the Federal Housing Administration's renovation financing program known as "FHA 203(k)." Others who have solid equity stakes, high credit scores and other assets that they can bring to the table are persuading large national banks to give them a mortgage.

Kenneth R. Harney can be reached at [email protected]

Comments
Career Q&A: What to do when your boss is stealing

Career Q&A: What to do when your boss is stealing

Q: I strongly suspect that my boss is stealing from our employer. As the property manager for this apartment complex, she handles all payments, deposits and other financial matters.A few weeks ago, I accidentally discovered some suspicious discrepanc...
Updated: 11 hours ago
Pinellas is at the center of a rise in Florida flu outbreaks

Pinellas is at the center of a rise in Florida flu outbreaks

Feeling a little sniffly or scratchy or stuffed up? It may be the flu, and you don’t want to wait around to see a doctor this year. This is not the time to write off flu-like symptoms, Tampa Bay area health officials and doctors warn. The influenza v...
Published: 01/16/18
Italian Butterfingers? Nestle selling candy business for $2.9B

Italian Butterfingers? Nestle selling candy business for $2.9B

Associated PressNEW YORK — Swiss food and drink giant Nestle is selling its U.S. candy business to Italy’s Ferrero for about $2.9 billion in cash. Ferrero will take over iconic chocolate brands Butterfinger and Crunch bars, as well as the sugary Nerd...
Published: 01/16/18
23 seek vacant PSC post

23 seek vacant PSC post

There is another Mariano seeking a job in Tallahassee.Pasco County Commissioner Jack Mariano, the father of state Rep. Amber Mariano, R-Hudson, is seeking an appointment to the Florida Public Service Commission, the powerful board regulating Florida ...
Published: 01/16/18
St. Petersburg’s apartment boom is spreading west

St. Petersburg’s apartment boom is spreading west

ST. PETERSBURG — Still more apartments are coming to St. Petersburg, this time to the Edge and Grand Central Districts just west of downtown. The new projects, all by out-of-state developers and more moderately priced than those downtown, will...
Published: 01/16/18
Florida raises insurance regulation grade from C to B

Florida raises insurance regulation grade from C to B

When it comes to regulating insurance, Florida is slowly improving. The Sunshine State raised its grade from a C in 2016 to a B in 2017 on the "R Street 2017 Insurance Regulation Report Card." It ranked No. 15 among all states.The annual report, writ...
Published: 01/16/18

US travel industry launches plan to reverse tourism decline

Associated PressNEW YORK — Travel industry representatives sounded an alarm Tuesday over declines in international tourism to the U.S. and announced plans to reverse the trend. Organizers of the new Visit U.S. Coalition portrayed the decline as long-...
Published: 01/16/18
Raymond James advice for small to mid-sized companies about activist shareholders? Prepare and listen

Raymond James advice for small to mid-sized companies about activist shareholders? Prepare and listen

Shareholder fights between activist investors and publicly traded companies are getting nastier, especially in some industries, and a lot of them don’t involve corporate giants like General Motors and Procter & Gamble.In 2015, according to Raymond Ja...
Published: 01/16/18
Dow bursts through 26,000 in record seven trading days

Dow bursts through 26,000 in record seven trading days

The Dow Jones industrial average blew past 26,000 Tuesday for the first time ever, coming only a week after hitting 25,000 and showing further evidence that the long-running bull market is alive and well."There are several reasons for markets to melt...
Published: 01/16/18
Arizona-based AFI Mortgage opens St. Petersburg branch

Arizona-based AFI Mortgage opens St. Petersburg branch

Times StaffAFI Mortgage, a subsidiary of an Arizona-based bank, is opening its first Florida locations in St. Petersburg and Lakeland. Its parent company, AmeriFirst Financial Inc., specializes in mortgages. "This Florida team is innovative, knowledg...
Published: 01/16/18