Remodelers rehabbing local housing picture

Contractors report rise in demand from last year

Home builders and real estate agents are struggling to find sales in the still recovering economy, but an unexpected bright spot is the home remodeling industry.

"I'm expecting about 15 to 20 percent growth this year," said Jason Arnold, owner of Arnold's Home Improvement LLC, a general remodeling contractor in Toledo.

Joe Bublick, of Bublick Roofing and Construction in Toledo, said his business was up 10 percent overall last year, but the first two months of 2010 "were just dead." This quarter, he said, "we do have work, but the question is: Is it going to sustain and how much of that bigger work is going to happen this year? But overall, it's a positive outlook right now. I'm very hopeful."

Spending nationally on remodeling was $290 billion in 2009 and $300 billion in 2010, according to a report by Harvard University's Joint Center for Housing Studies.

The report predicts remodeling spending will increase at an inflation-adjusted 3.5 percent average annual rate this year and in the next few years -- well below the 12 percent annual pace during the housing boom of 2003-2007 but sharply higher than in the 2007-2009 downturn, when remodeling spending dropped 12.5 percent.

"It's picking up somewhat out there. We're hearing from members that their phones are ringing again and people are coming up with money for remodeling projects," said Gwen Biasi, spokesman for the National Association of the Remodeling Industry, in Des Plaines, Ill. "The projects aren't as huge as they might have been five years ago, but [remodelers] are seeing an increase."

East Toledo homeowners Chris and Dena Vargas needed a new roof for their 84-year-old house at 321 Sheldon St., on which the value dropped so much that they were forced to postpone for two or three years their plans to sell it.

When they solicited bids, they were pleased with what they could get for $7,000 -- a new roof, removal of five previous roofs on the house, new roof insulation, and new gutters.

"It's amazing," said Mrs. Vargas. "Our gutters are horrible, and our insulation is so old. … We're trying to better every room in this house."

The family, which includes two children, could have forgone the roof, but Mrs. Vargas said when they bought the house four years ago a home inspector told them a good way to sell the house was to replace its old leaky windows and put on a new roof.

Fueling the resurgence in remodeling are waves of home foreclosures and plummeting house values that are causing many homes to be "underwater" -- or worth less than the value of their mortgages -- and preventing potential buyers from moving up to new houses or more expensive existing houses.

Some home remodelers, such as David Rumpf, of David C. Rumpf Contractor, of Sylvania, have taken great advantage of the housing crisis by focusing on the plethora of work available fixing up foreclosed homes, many of which have either been damaged by previous occupants or through neglect from sitting vacant two or three years.

"What I've been hitting lately is a number of those foreclosed homes. I kind of think that's where some of it is at for many of us," said Mr. Rumpf, a general remodeler and carpenter who was busy last week repairing walls, ceilings, and insulation in a house at 3626 Christie Blvd. in Toledo's Westgate area. The house was foreclosed upon two years ago, and the new owner hired Mr. Rumpf to fix it up.

"The same situation has been brought to me a couple of times by customers," he said.

Mike Marchant, general project manager for Arnold's Home Improvement, said, "Because of how the new construction has suffered, a lot of people are turning to remodeling their homes instead of selling them. And that has contributed to us staying healthy." His business is up 10 percent over last year so far, and he hopes to finish the year even higher.

"Spring is basically our biggest period, but when I looked at the last two months I was amazed," he said. "I approved payroll for all the jobs we did and it looked like a typical week in the summer."

Mr. Bublick said his business last year didn't pick up until June, but this year the uptick in inquiries for work started right after the holidays. It seems like there's a lot of pent-up spending by people who have been waiting and waiting. They figure now that they're not going anywhere and they might as well fix up their home."

His firm has been contracted this year to do a range of work. "I've had the $15,000, $20,000, and $25,000 jobs. Those are nice jobs and they're out there," he said. "I've had maintenance, roofing, kitchens, additions, a combination of things and even some basement inquiries. Those can be $20,000 or up."

According to Remodeling Magazine's annual analysis of remodeling projects in the region of the country that includes Ohio and Michigan, the average prices of common remodeling projects include $67,533 for a basement, $17,304 for a bathroom, $22,239 for a minor kitchen redo and $60,092 for a major one, $23,347 for a major roof replacement, $54,517 for an attic bedroom addition, $11,246 for a wood deck addition, and $90,802 for a family-room addition.

With that kind of spending on projects, many home builders who are having difficulty finding clients are doing remodeling.

Local custom builder Chuck Barchick, of Barchick Custom Homes in Toledo, is among the builders who have taken on remodeling projects to help pay the bills.

"I've done a kitchen, a basement, and I've got about 30 leads. I'm meeting with at least six clients regarding windows, additions, and two kitchens," he said.

"We're happy to hear our phone ringing again after the last two years. Things will definitely be better this year."

With home builders entering the remodeling ranks, an already competitive home-improvement bidding arena is becoming more intense, which should benefit homeowners.

The Vargases, who had the roof on their home in East Toledo replaced by Mr. Arnold's remodeling firm, are among an increasing number of homeowners who decided to pay for their home improvements out of their own pocket rather than seek a bank loan or use home mortgage refinancing.

Contact Jon Chavez at: jchavez@theblade.com or 419-724-6128.