Recent uptick isn’t huge, but it does show signs of a possible increase for professional remodelers
By Jon Bell
For the HBA
A recent wave of good — or at least more optimistic — news has put the spotlight on the remodeling scene here in the Portland metropolitan region.
For starters, the January 2012 issue of Remodeling magazine put Portland at number nine on its second annual list of the 100 most-active U.S. markets for remodeling activity in 2012. Last year, Portland was number 17.
And in late January, the National Association of Homebuilders announced that its measure of remodeling sentiment, the Remodeling Market Index, had risen to 46.6 in the fourth quarter of 2011, highest level in five years.
“Consumers seem to be feeling more optimistic that we are done dragging along the bottom and are beginning to move in an upward direction,” said Mitch Stanley, president of Stanley Remodel & Design. “While the consensus seems to be that it will be a gentle slope upward rather than a steep incline, they are all too happy to travel in that direction and feel that 2012 will see improvement in their economic condition over the last few years.”
The result could be a more active remodeling market than the region has seen over the past few years.
Remodeling magazine bumped Portland up on its list partly on reports that the Portland metro region has been making a faster economic recovery than many other areas around the country. According to the magazine, since 2009 Portland has added 4 percent to its gross metropolitan product and employment per capital increased by 2 percent. Both of those measures exceed the national average by 1 percent.
The NAHB’s RMI calculations showed modest improvements in remodeling activity across the entire country near the end of last year, and also indicated that a similar uptick is likely in store for the coming year. Even though the RMI was up to its highest level in five years, however, it was still below 50. Anything below 50 indicates that more remodelers are reporting lower activity than are reporting higher activity.
“The consensus is that homeowners are gaining more confidence in the economy,” said Dave Nielsen, CEO of the HBA. “NAHB’s recent report that its National Remodeling Index is at a five-year high, combined with Remodeling Magazine listing Portland as number nine in its hot 100 remodeling markets for 2012, provide a great one-two punch to give encouragement to our industry.”
Those kinds of mixed signals coincide with what many remodelers are seeing out in the field.
Steve Klingerman, president of T.H.E. Remodel Group, said he’s seen an increase in activity that’s likely the result of people putting off projects for so long during the downturn.
“I think consumer confidence is up and people are tired of waiting,” he said.
Klingerman also said that, with Portland’s housing market still in recovery and not the most attractive option, people have decided to stay put. Rather than look for something new, they’re fixing up their current homes and sticking around.
“A lot of people have realized that they have really nice homes and that they’re probably going to be stuck in them for a while,” he said. “They’re looking into renovating instead of leaving.”
On the other hand, Larry Mock, president of Cascade Custom Remodel & Construction, said that while more people may be showing interest in remodeling projects, there’s not been an increase in signed contracts.
“The reason,” he said, “is the economy — and fear.”
The perspective of Todd Hertner from Rebuild LLC adds yet another response to the mix. He’s not seen an increase or a decrease, but simply a steady stream of jobs.
“I feel like we have had the same steady flow for the past couple years,” he said. “The jobs are still coming, it just takes a bit longer to cultivate.”
One area that many remodelers have found more common ground on of late is the kind of projects they are doing. By far, they are kitchen and bathroom remodels, not large additions and not as many whole-house projects. Lee Zajic, president of NW Renovations & Design, said he’s also seen new demand for aging in place renovations that will allow people to stay in their homes for as long as possible.
Another commonality is that homeowners are expecting to get much more out of a remodel for their money than they used to.
“People are watching every penny more than before,” said Stanley. “I think there’s a sense that people are really wanting a better value than before, when things were flowing free and easy. They want a better value because they don’t have what they had before in terms of equity.”
Whether or not 2012 continues the upward trend and ends up a better year for remodeling than 2011 remains to be seen. Plenty of economic uncertainty remains, and not just in the housing market. But, long-term, professional remodelers seem fairly confident that better days are in the future.
One thing they are certain of is their commitment to professionalism will continue to set them apart from people who are either unqualified or maybe jumped hastily into the field when other sectors crashed during the recession. Many businesses new to remodeling also offer cheaper prices as a way to generate business during the downtimes.
“(People) who fell into that trap have managed to stay busy, but I would venture to say have also lost money and are struggling to stay in business,” said Zajic. “Clients have to realize that you get what you pay for and members of PRO get continuing education, mentor with others, and in general are professionals like any lawyer, doctor, or accountant.”
Steve Heiteen, president of Portland Remodel, said there’s a big difference between a professional remodeler and someone with little experience who’s only recently gotten into the field. And Jeff Metke, president of Metke Remodeling & Woodworking, said professional remodelers — those involved with PRO and the HBA, who have a solid track record and a history of satisfied clients — will always be the preferred choice for homeowners who want to do any kind of remodel right.
“Professionals are simply much more qualified,” he said. “With people who might just be getting into the field, you, the client, are always going to be their guinea pig.”