The Washington area so far has largely avoided the drop in home remodeling the rest of the nation suffered in 2007 as a result of the housing market downswing, according to local home remodelers.
Nationwide the home remodeling industry suffered in 2007 as a result of the housing market downswing, according to a Harvard University study, but local home remodelers say the region has been slow to see the trend.
“As we are looking at 2008, we have a solid backlog in place leading us into the new year, probably a better backlog than we had last year at this time, and the jobs are the same type, really,” said David Merrick, owner of Merrick Design and Build and vice president of the Washington-area chapter of the National Association of the Remodeling
Industry.
“But this year things are leveling out a little, which would be expected if you’ve experienced growth for such a sustained period of time,” Merrick said.
He added that while the local NARI chapter doesn’t keep sales statistics, remodeling companies have reported consistent sales growth since 1989.
In October, Harvard’s Joint Center for Housing Studies projected that homeowner remodeling spending for 2007 nationwide would be 2.3 percent lower than in 2006 and that the downward trend would continue through 2008.
“We had 7 or 8 percent growth this year,” said Chris Landis, who owns D.C. remodeling company Landis Construction. “The slowdown didn’t really happen until this quarter, at least in the District.”
Landis said that the credit crunch brought on by the housing downswing is beginning to affect the remodeling business as homeowners are having more trouble refinancing their mortgages, which would allow them to fund their projects by tapping into their home equity.
Although home sales have dropped by 30 percent across the region, most homeowners don’t remodel in an attempt to make their houses more attractive to buyers because its not a financially smart move, remodelers said.
“You’re not going to get a return on your investment that equals the expense,” Merrick said. “You’d be better off to sell the house the way it is for a little bit less money and let someone else do it when they buy it.”
Merrick is optimistic that with D.C.’s high average household income and steady economy, business won’t dip too low, especially after the holidays.
“Remodeling is usually the first place people spend extra money,” he said. “We love Christmas bonuses, because they usually come to us.”
