As New Home Starts Slow, Remodels are on the Rise

[Gryphon]

It's a pattern that can be seen over the past several generations i'm sure,  but I've seen a decided uptick in the number of renovations/additions I've been asked to work on in the past year. It makes sense...if the market isn't right to sell your existing home, make your existing home work for you.
In the past six months I've dealt with a variety of price ranges and there are lessons to be learned from all of them.

Client One
The existing 3500 square foot ranch was perfect for the homeowner when  he was a bachelor...the large living spaces had plenty of room for a pool table, grand piano, and the requisite room-sized television. The oversized master suite dwarfed the houses only two other bedrooms though, and the now married with child and one on the way owner was out of room to put the children. The house was already the white elephant of the neighborhood, in part to an incredible resort style pool the owner had built at a cost of $150,000. The amount invested in the home could not be recovered when they put it on the market, and so they decided to expand the house and stay put in their convenient, friendly neighborhood. An additional 1500 square feet allowed a master suite that focused on the back yard, additional closet space, expanded kitchen, an additional bedroom and library. A huge new family room, surrounded in glass, will allow them to entertain poolside, and frees up the original family room to become a messy play room for the kids. Renovation costs easily exceeded the initial cost of the house, and placed these owners total investment close to $1,000,000 in a neighborhood of homes that are generally priced in the $400-$600K range. The lesson here is two fold. First, their pool addition was the sort of thing that they should have realized was not going to net them a profit at resale time. In fact, many "lookers" were worried about its upkeep. They had overimproved, not a good idea when resale costs are to be considered. WIth the expansion, however, they decided to go for broke and stay put. They spent money for themselves, not for future resale. So the real lesson is to examine your motives--are you concerned with resale or are you building the house for yourself?

Client Two
Owned a charming mid century house in a desirable neighborhood. The two bedroom one bath floorplan suited them fine when they purchased the house six years ago, but was bursting at the seams with two young children added to the family. They put the house on the market, but met resistance from buyers who desired at least another bedroom and bath. They decided to expand the house with a mind toward reselling it in a few years. A simple master suite addition, in scale with the existing  house, was added at a cost of around $50,000. Shortly after completing the addition, they received an unsolicited offer on the house and were able to sell it, making a handsome profit. The extra bedroom and bath added much more than $50,000 in value. Lesson  here...a smart remodel that gives buyers what they are looking for can add a lot of value and make a house appeal to a broader pool of buyers.

Client Three
Purchased a 4,000 square foot french style ranch built in the 80's. While the house was fine, it's low ceilings and bowling alley hallways made it feel small. The clients however, were sold on the wooded 3 acre lot in town. Neighboring homes generally sell for close to a million dollars, but there are several large estates in the neighborhood that appraise for $2 million or more, so the $600,000 purchase price seemed a bargain. To accomodate their large family, the owner's opted to add over 3000 square feet in a combination of a new second story and various additions to the existing footprint on the main level. A semi-attached four car garage has another 2000 square feet above it, offering their teenage children a self contained apartment. An elevator in this wing means that the apartment could also be used should they ever need to house an elderly relative. These owners plan to spend $1.5 million on the expansion of the house....bringing their total investment over the $2 million mark. Lesson here...some people have too damn much money. 

[Sandy Eggo]

Environmentally speaking, I'm happy that remodels are on the rise. I think too much space is being used for these sprawling sub divisions and grandiose new housing. I love to look at the huge and admittedly beautiful homes, but I can't understand why people need so much. You'll have someone with family of 4, but justify 5 to 6 hundred square feet. To me, it seems excessive and unnecessary, but it's their money.

[Gryphon]

I agree. I enjoy working on remodelings, the whole "transformation" aspect is really cool to me.
And while I suppose it would harm my work if people only built what they needed, I agree with that as well. I regularly have clients who will build a huge house (the average new house I do is probably 5000 sf finished and heated, 8000 under roof) with bedrooms for family members that will only visit a few times a year. One client Im working with now has a whole "princess suite" for a granddaughter. Im thinking, why cant she sleep on an aerobed?? LOL

The whole remodeling thing has me thinking...and Ill ask you guys, "what would you change about your existing house to make it "perfect?"

For me, I'd never consider anything other than a cosmetic remodel to my place, because the neighborhood cant support much more than I already have...but if I were staying in this house forever and wasn't a bit concerned with resale I would do these things, in no particular order:
1. rip out the soaking tub and do a huge shower with several heads
2. install custom closet organizers in every closet.
3. womp up the millwork everywhere...Id like deeper baseboards, some raised paneling in the dining room, maybe a column or two here and there.
4. New front door and garage doors to replace the builder standard I  have.
5. stretch the dining room and guest room above it three feet into the backyard.
6. add a sunroom off the living room that can be opened up to double as a screen porch
7. get a landscaper in to spice up the backyard. Id like a water feature of some kind, more and better plantings, maybe a larger patio with a built in grill.