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Renovations Make a Comeback

THE Columbia is a tall yellow-brick condominium at the corner of Broadway and West 96th Street, populated by many families and professionals. On weekday mornings, the lobby bustles with kids scurrying to school and grown-ups hurrying to work. Lately, though, there has been an addition to the hubbub: Contractors, lines of them, waiting for authorization to ascend the elevator to the apartments they are in the process of renovating.

Men with tool belts used to be a common sight around condo and co-op buildings in a city that was renovation-mad. But when the economy collapsed and the real estate market tanked, the contractors, along with the carpenters, plumbers, electricians, floor guys and stone guys, seemed to fade away.

Now they’re coming back. Across the five boroughs and beyond, the renovation business, which fell victim to tightening credit, declining home sales and overall economic misfortune, is starting to pick up. The increase reflects contradictory forces: a fitful but growing sense that the economy is getting better and, at the same time, more subdued ambitions for the future.

“I think a lot of it has to do with people having a longer-term perspective in their home now,” said Doug Milles, a member of the condo board of the 300-unit Columbia. He added, “I’ve always felt personally that it’s a good time to invest in your property during down times, because when things get better, you’re going to have a lot more attractive property.”

Contractors around the region say their phones are starting to ring again.

“We’ve been swamped for the last month,” said Constantine Rigas, the owner of Bullfrog Builders, which does work in New York City as well as Long Island and Westchester County. “We’re getting just a tremendous amount of people saying: ‘I spoke to a friend six months ago and had been meaning to call you. I’m ready to do this now.’ ” Business has been so promising for Rikk Davidson, the owner of As You Wish Interiors, a design and building company, that he is opening a showroom in Midtown Manhattan this spring. “We are putting our money where our mouth is,” he said.

Barry Goggin, the owner of the Barry Goggin Construction Corporation in Ronkonkoma, N.Y., is now booked about six months in advance for remodeling jobs, most of them on Long Island. A year ago, it was two months.

“It’s like there’s been a pent-up demand,” he said. “People needed work done and maybe put it off until times got better.” Mr. Goggin says he believes that many of the clients now upgrading or expanding their homes would simply have bought a bigger house several years ago.

Local statistics are hard to find. The New York City Buildings Department, for instance, is responsible for issuing building permits, but doesn’t distinguish between projects done for commercial developers and for individual homeowners.

Moreover, many home renovation projects don’t require permits. (Those that do involve structural changes, like rearranging plumbing.)

The Joint Center for Housing Studies at Harvard University, however, predicted in a recent report that the downturn in the home remodeling industry nationwide had hit bottom and that business would steadily increase through the rest of 2010. “Housing prices in most markets of the country have bottomed out,” said Kermit Baker, the director of the remodeling futures program at the Harvard center, which does policy research on housing markets. “People are saying, ‘Let’s go ahead and do that project.’ ”

In 2004, during the frothy heyday of Manhattan real estate, Joe Laszlo bought the 475-square-foot apartment in Morningside Heights that he had been renting for five and a half years. The building was converting to a co-op, so he got an insider price. He expected, of course, that the market value of the apartment would climb (indeed soar, if the good times continued) and that several years later he would sell it and buy a bigger, nicer place.

Last spring, Mr. Laszlo realized that his plan probably wasn’t going to work. So he is making his place more attractive. This means renovating the “renter-grade” kitchen (dated appliances, inefficient storage space, postage-stamp counter space) and bathroom (crummy fixtures, boring tile).

Finding a contractor to do the job was no problem, since no one seemed to have much work. “With one or two exceptions,” he said, “folks were interested in talking to me for what seemed like a relatively modest project.” He got four or five bids and went with a midrange candidate; work began last fall. The renovation was supposed to be completed in eight weeks.

In fact, it took almost six months (total cost about $36,000). A few foul-ups contributed to the delay — like the countertop that took weeks to create, and then fell and smashed to pieces the day it was to be delivered.

But the contractor’s office got busier. Mr. Laszlo felt as if he had “undivided attention when I started the project,” he said. “By the time I reached the midpoint, it felt like it was divided. That was good for them. Not so good for me.”

Though contractors are again in demand, they have far to go to get back to their boom years, which means homeowners can still get a good deal.

Sheri Whitley estimates that by doing renovation work now instead of a few years ago, she and her husband, Mark van Dok, are saving about $10,000. The owners of a co-op in a 19th-century building on Adam Clayton Powell Boulevard, they are having a parlor converted to a master bedroom, and replacing windows and floors in a second bedroom.

They bought the apartment for a steal during the height of the boom because the owner had to sell quickly. For a variety of reasons, including a newborn baby, they put off major renovation.

“Before, we had thought we would strip the woodwork ourselves,” Ms. Whitley said. But with prices more reasonable now, “we said, let’s just hire someone to do it.”

Some renovation projects amount to the extra steps necessary to sell the place in today’s uncertain market. Jordan Lippner recently listed his two-bedroom prewar co-op on West 78th Street for $1.595 million, but only after he replaced the floors.

When he bought the apartment four years ago, he renovated it, adding built-in bookshelves and installing top-of-the-line appliances (Viking range, Thermador double oven, Bosch dishwasher). But by the time it came to the floors, he’d run out of money. He hid the chipped and worn planks under area rugs.

When he decided to sell, his agent, Joyce Bernstein of Prudential Douglas Elliman, advised him that new floors were worth the expense — and the inconvenience. A few years ago, she said, she would have told him the opposite.

“I’d have said, ‘People will pay up and fix the floors themselves.’ ”

But in today’s market, “you really have to give something special to get the money you want,” she said, adding, “The rest of the apartment was in such mint condition, the floors would have been the first thing the buyer would notice and want to cut the price.”

Mr. Lippner got her point. “If I was going to spend over a million and a half dollars on an apartment,” he said, “I wouldn’t want to see floors looking like they were 50 years old and crumbling.” The new ones cost $13,000 and are Brazilian oak.

Like prospective buyers, however, prospective renovators may still find their visions tempered by financing hurdles. In previous years, owners used home-equity loans and home-equity lines of credit to finance lavish remodeling projects.

The problem with getting one today is not the interest rates: a revolving home-equity line of credit is relatively cheap. (The average rate was 5.52 percent in February 2010, compared with 8.70 percent in February 2007, according to Keith Gumbinger, a vice president of HSH.com, a mortgage analysis and financial publishing firm. The average rate on a fixed-rate home-equity loan was 7.86 percent in February, compared with 8.09 percent in February 2007.) But banks and other lenders have tightened their standards, and home-equity financing is harder to get.

As a result, many people are paying cash. That’s what Mr. Lippner and Ms. Whitley and Mr. Van Dok did. So, too, are Susan and John Gramas, a retired couple who hired Mr. Davidson of As You Wish Interiors to do extensive renovations on their semiattached 1930 house in Bayside, Queens.

First came the bathroom. They deep-sixed the tub, installed a shower with a granite bench, and redid the floors and wall with glass tile in shades of brown and beige.

Then came the kitchen — an objectionable space, Mrs. Gramas said, with pink and gray Formica. The new space has been reconfigured, and has granite countertops (beige with gray and green flecks), glass tiles, cherry cabinets and a stainless-steel Viking refrigerator.

Now to the basement. They have upgraded the electricity and are redoing a bathroom and laundry room, as well as creating a special space for their cats and their litter boxes. Mrs. Gramas says they have spent about $120,000 on the renovations and are thrilled.

“We knew it was a lot of money,” she said. “But we figured you can’t take it with you, so you might as well enjoy it.”

Back in his small Morningside Heights co-op, Mr. Laszlo, too, has found that if he couldn’t trade up, the cost and nuisance of a renovation were worth it.

“In the end, I love the new space,” he said. “It makes me happy.”

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