BY THE NUMBERS
Residential Remodel Permits
Year/Butler County*/Hamilton/Middletown
2007/342/115/88
2008/304/125/75
2009/299/357/268
2010/286/191/206
2011/238/133/135
2012/218/204/136
Sources: City of Hamilton, city of Middletown, Butler County
*covers all 13 townships in Butler County and the villages of College Corner, Millville and New Miami.
More people are deciding to spend money to remodel or renovate their homes, a sign the economy is recovering from its recessionary doldrums, according to those involved in the local remodeling market.
That change in discretionary spending has led to increased business and a boost in hiring for home builders and remodelers.
Signs of that resurgence can be found in the National Association of Home Builders’ quarterly remodeling index, which reached 55 in the fourth quarter, its highest level since the first quarter of 2004, according to a report issued Monday.
An index above 50 means that more remodelers report market activity is higher compared to the prior quarters than report it is lower.
The overall index averages ratings of current remodeling activity with indicators of future remodeling activity.
“Remodelers are optimistic about the outlook for slow and steady market growth in the new year,” said Bill Shaw, NAHB Remodelers chairman. “Professional remodelers reported more work from large and small projects as well as overall home repair.”
Residential remodeling numbers in the region have favored shifting business models from custom construction to a diversification of resources and the creation of jobs in an industry that has drastically reduced staffing in recent years, according to those in the home construction and remodeling business.
The amount of remodels, alterations and additions were up to 204 in Hamilton for 2012, up from 133 in 2011. In Middletown, the amount of such projects numbered 136, up only one from the previous year.
Those numbers are a far cry from the massive surge that saw Hamilton fielding 357 such projects in 2009 and Middletown accounting for 268 such projects that year, but double or nearly double what both cities saw prior to the recession.
For Butler County’s townships and villages, permits filed for remodelings reached 342 in 2007, but declined in recent years to 218 in 2012.
Artisan Estate Homes, which previously only dealt in home construction, diversified to include high-end remodeling products in an entirely new home remodeling division and boosted hiring of contractors by about 25 percent, according to co-owner Rick Seitz.
“We’re doing more remodeling business now than we were doing five or six years ago,” Seitz said. “Our new construction keeps many of our guys working non-stop year round.”
Neal Hendy, president and co-owner of Neal’s Design-Remodel, used to be exclusively in the custom remodeling business and found it more difficult after 2008 because of the increased volume of competition from home builders forced to venture into the remodeling business to stay afloat.
“It was the only game for them to do,” Hendy said. “I watched competition grow like you wouldn’t believe.”
The recent release of pent-up demand has opened the pocketbook of homeowners a little bit, said Hendy, who draws nearly half of his business from Butler and Warren counties.
“So many people wanted to do something for so long and now they’re finally feeling more confident,” he said.
Spending time with about 35 remodelers last month proved further illustrate that point, Hendy said.
“I’ve never seen these guys pumped up in five years because … there’s an air of confidence that we’ve weathered a storm,” Hendy said.
With the renewed confidence have also come cost increases, as suppliers for the industry started increasing prices in November for the first time since 2007, he said.
“Whether they be cabinet suppliers, whether they be lumber yards, everybody’s trying to make up for the last four years that have been extremely brutal,” Hendy said. “Yes, there’s an uptick, but how long that uptick is, no one knows.”
John Ballantyne, president and owner of The Leland Group, said prior to 2008 his business primarily involved new construction with a small percentage of remodeling.
That all changed during the recession, when his company didn’t have a house to build.
“We were doing everything from remodels to fixing up homes,” said Ballantyne, who serves as president of the Home Builders Association of Cincinnati. “Anything to keep a skilled carpenter or other worker on the job. We were building decks, fixing up houses on the outside, retaining walls — you name it, we did it. If it was something in our skill set, we took it on. We said ‘no’ to nothing.”
That meant taking $7,000 projects instead of ones that averaged $600,000, something he said was “a huge change of mindset.”
Like other home builders, that meant cutting back on jobs, But now, with the home building market surging and customers spending money more freely in 2012 on remodeling efforts for bathrooms, basements, kitchens and room additions, Ballantyne said he and other home builders are boosting hiring.
“We’re getting more business than we did in the past five years and better remodels, more substantial-type stuff,” he said.
The uptick in remodeling is helping workers from various trades, including companies that specialize in replacement windows, garage doors, light fixtures, plumbing, appliances and home improvement items in and around the home, Ballantyne said.
“People are saying ‘I don’t want to spend a lot of money building a new home, I want to stay in my remodeled, refurbished home because even though I’m putting some dollars into this thing, I’m going to be here for a while,’” he said.
The downturn in the housing market saw many people staying put instead of purchasing a new home, said Dan Dressman, executive director of the Home Builders Association of Cincinnati.
“In a lot of cases, their home dropped in value so they thought they’d stay in the home a little longer,” Dressman said. “They decided to do some remodeling and make some changes in their current home and design it for what their needs are now, rather than buy a new home.”
The strengthening of the remodeling market also can be linked to the aging of the region’s housing stock and the aging of demographics, he said.
“Baby boomers are getting older,” Dressman said. “Their families are gone and they’re looking at their house and realizing they have all these bedrooms now and they really don’t need them, so let’s do some remodeling instead.”
Future market indicators increased from 49 in third quarter 2012 to 56 in the fourth quarter, according to the NAHB index. Current market conditions also showed improvement, rising from 52 in the third quarter to 54 in the fourth.
Remodelers indicated that activity was particularly strong in owner-occupied properties, rating all categories of remodeling in owner-occupied homes 56 or better.
“With existing home sales up, the increase in the RMI partially reflects the remodeling work new home owners undertake when they move in,” said David Crowe, NAHB’s chief economist. “Consumers are gaining confidence in the economy and feeling more comfortable pulling the trigger on large and small renovations.”
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