Inman

Remodeling the American Dream

Lately, I have customers who want to buy new, new, new, but they’re also going into budgetary shock. I have one particular set of clients, a family, who are having trouble finding their dream home — they want to be downtown, which is popular, in a top school district, and they want a three-bedroom that is around 2,000 square feet. To get all that with a sparkling new kitchen, too, would bust their budget, since all the available candidates are north of $3 million.

So they are getting more and more open to the idea of renovating. In their honor, I hung on every word of the “Remodeling Trends” panel Wednesday at the National Association of Real Estate Editors conference. The panelists not only outlined trends in the sector, they offered some canny advice to would-be renovators. Here’s what I learned:

Nationally, remodeling spending will probably decline a little, because home-improvement sales typically lag existing-home sales, and we saw existing-home sales peak in 2005. The explanation for the lag, according to panelist Jim Corey, who is the editor of Replacement Contractor magazine, is that typically there’s a burst of spending by sellers as they ready their homes to take to market. Also, after those homes are sold, new buyers tend to renovate to customize their purchases.

That doesn’t mean remodeling won’t be going gangbusters. Corey explained, working with numbers from Harvard’s Joint Center for Housing Studies, that any slowdown is expected to be both mild and shortlived.

So what are the trends? Nearly every panelist mentioned the pervasive influence of TV design shows. Angelo Surmelis, the host of “24 Hour Design” on HGTV, noted there is an increasing use of outdoor space — those West Coast outdoor living/dining rooms are influencing the rest of the country. He told a story of friends who were using their Chicago terrace … in January. “They had the outdoor heaters going, and by hook or by crook, they were going to have a drink out there,” said Surmelis.

Jay Cipriani of Cipriani Builders in Woodbury, N.J., noted that his firm specializes in kitchen and bath remodeling, and that their average job is $60,000. He noted that jobs take longer on the selection end. “Years ago, we used to offer three faucets for the bathroom sink,” he said. “Now, there are 300.”

Cipriani offered a number of great tips for homeowners. For one, he noted that it’s OK to vet your contractor. “In New Jersey, plumbers and electricians have to go through an education process and take a test before they work in your home, but contractors and builders do not,” he said. “Don’t be afraid to ask, ‘Who do you do your banking with, because I want to call your banker.’ “

Secondly, he encouraged homeowners to specify everything. “You need to know the brand name, model number, size, color and quantity for everything you’re getting, down to the switchplates,” he said.

Finally, he explained that renovators want to make sure their contractor has the proper insurance — including workers’ compensation. That way, if a member of the renovations crew gets hurt, the claim goes through the contractor, instead of landing (you guessed it) on the homeowner’s insurance.

What specific products are on Cipriani’s clients’ most-requested lists? Radiant heat floors, bamboo or cork flooring, and pot-filler faucets. “For a $300 or $400 item, they’re a great conversation piece,” he noted.

Pat Wilkinson, senior director of marketing at The Home Depot, noted that the design industry is having a significant impact on women. In contrast to clinics from “the old days” — she mentioned tiling and drywall as two examples — she says that The Home Depot’s most popular clinics are “do-it-herself” workshops, which she says can draw as many as 600 people.

Anything that speaks to the issue of high energy prices also does well, said Wilkinson. Popular items range from compact fluorescent bulbs to programmable thermostats to Energy Star appliances.

The home-improvement chain is also trying to address demographic trends that show that white consumers will not continue to remain a majority. One attempt at niche marketing was Colores Origenes, a line of paint developed for Hispanic consumers. In a twist, the line of 70 vibrant colors, marketed as Caribbean- and Latin American-influenced, has proven to be a hit with the general market, Wilkinson said.

But the most striking thing that she said related to a trend coined “the urbanization of cities”: in essence, more and more people are moving out of the suburbs and into cities. (We are certainly seeing that here in New York, in spades). The new urbanites, apparently, are renovators. The Home Depot is playing to them with a different type of store, which is more design- and less hardware-oriented — as I found out when I went to one a few blocks from my office and had them tell me they didn’t know what a saddle was.

What those marketers do know is that city dwellers are willing to spend freely on their smaller spaces. “A survey we did a couple years ago,” Wilkinson said, “noted that people who live in condominiums spend the same amount of money renovating their homes as people who have driveways and backyards.”