Real Estate: Central Ohio's renovation boom
With all of this talk of buyers rushing to outbid each other for every house that comes on the market in Central Ohio, don't be so quick to pound the “For Sale” sign in your own front yard. Yes, there's a good chance you'll get a pretty penny for your home. But then what? You're likely going to have to find a new home of your own, and suddenly, you're on the wrong side of the market equation as the buyer, scrambling to outbid the competition for a home that's making someone else a pretty penny at your expense.
So who's really benefiting? You could make a good case that the folks in the remodel and renovation business are the real winners. In this current environment, many potential buyers are finding that they can't find the house of their dreams at a price they can afford. Forced to compromise, homeowners are sometimes choosing to buy a home that isn't exactly perfect in a neighborhood that is, and then renovating it to fit their needs. Others, as Columbus Dispatch columnist Joe Blundo's personal essay on Page 50 highlights, are deciding, after looking around a bit on the open market, that their current home isn't so bad after all, and just needs a little facelift. Remodelers are catching homeowners both coming and going.
“The renovation boom has been huge,” says Monica Miller, design manager for J.S. Brown & Co. “We sold 50 percent more than we anticipated last year, and it feels like it's still climbing.”
Miller says much of the work is being done “in the areas that are highly desirable, but without a lot of inventory”—neighborhoods such as Upper Arlington, Bexley, Powell and German Village; pockets of Dublin that need updating, such as Muirfield Village and Amberleigh; or Highland Lakes in Westerville. Of the 37 jobs that J.S. Brown was working in early May, Miller says eight were in Upper Arlington, eight were in Dublin and four were in Powell. “We've done like five houses just on London Drive in Upper Arlington,” Miller says.
The reasons for the renovation boom are numerous. Besides the market factor of scarcity, other contributors include low interest rates and what Miller says was a “pent-up demand from people who needed or wanted remodeling projects during the recession but put them off because of the economy.”
Jamie Bratslavsky, the director of marketing for Dave Fox Design and Build Remodelers, says “a lot of our clients are empty nesters, but we also get a lot of people in their mid- to late 40s, people coming into their own career-wise. They're not looking to downsize, they just want to make their home more comfortable for them.”
And while Miller and Bratslavsky say that the majority of their clients are people who have lived in their homes for some time, both say they're seeing an uptick in folks who are buying and then remodeling, often working the cost of the renovation into the mortgage. “Availability is such an issue,” Bratslavsky says. “People aren't able to get into the homes they want, so they buy a home that doesn't fit all their needs and remodel.”
Miller recalls one client who had just purchased a home in Upper Arlington. “As we're walking through the house, she's saying, ‘I hate this master bedroom. I hate this dining room.' I hate the bathrooms.' I finally said, ‘I hope you don't mind me asking, but what made you buy this house?' And she said, ‘We've tried to buy half-a-dozen homes in Upper Arlington, and every time we either got outbid or we didn't act quickly enough. So when this one came up, even though it wasn't exactly what we wanted, it was where we wanted, so we acted.'”
Miller says, “They invested at least half of what they paid for the house in remodeling. But now they have the house they love in the neighborhood they love. If you can't get the house of your dreams, you can get in the neighborhood of your dreams and then make it the house of your dreams.”
There so much remodeling going on in Central Ohio, in fact, that it's leading to labor shortages, escalating prices and increasing lead times. “The individual trades are so backed up and busy, and trades in general are having trouble finding help—I don't know why, it's a great career,” Bratslavsky says. “But the gap between the need for trade work and the ability to fill it is growing wider.”
Realtor Jeff Ruff of Vutech & Ruff says the renovation boom is causing delays in real estate deals. Invariably, a sales contract includes a home inspection that invariably reveals a list of repairs needed before the sale is completed. “It's getting harder and harder to get that remedy list completed, much less by closing,” Ruff says. “It's creating a lot of anxiety in our business.”
Ruff even fancied the notion of improving his own home. “I wanted to put a room addition on,” he says. “You'd think, as a Realtor, it would be a little easier for me. Not true. They've got all the work they want and more. And the prices are extraordinary—upwards of $200 a square foot.”