In the wild real-estate economy of three years ago, it often made sense to buy, let it appreciate and sell. Obviously, that often doesn't work anymore. So homeowners have returned to a more traditional approach in which they stay put and fix up home sweet home, knowing their investments will add value if they decide to sell.
While construction of new homes and subdivisions is down, applications for building permits are gradually going up, says Ashland Planning Director Bill Molnar. In fiscal year 2007-08, the city granted 105 residential addition permits. The year before it was 97 and the year before that, 94.
"We're seeing considerable activity with smaller residential construction and remodeling," says Molnar. "People seem to be considering investing in what they currently have instead of a bigger undertaking."
The city receives less revenue because permits are for lower value projects, but city employees still have to put as much work into remodels as they did in new construction because of changes between old and new building codes, says Molnar.
Contractors are also seeing a trend toward remodeling.
"People are deciding to stay where they are and upgrade homes to what they like, with some doing additions," says Al Harris, a Medford remodeler. Most of his jobs are in the $10,000 to $50,000 range, he says.
Medford contractor Diana Glover of Estate Renovations says she sees a lot of people updating kitchens, master baths and master bedrooms — with lots of bathrooms getting "spa'd out," with luxury showers and baths, multiple shower heads and tile floors.
"We're seeing a lot of people staying where they are and upgrading instead of selling. It doesn't have value anymore — to get all your money in five years and sell," says Glover.
She said that after a slow spring "it's starting to get a little noisier," with numerous remodels of over $125,000 and plenty of homeowners ripping out old carpet and laying down tile or wood floors. These are cleaner, more environmentally sound and add value to the house.
Some are adding exercise rooms, too, she says — a sign the economy is still ticking underneath the readjustment and that people still believe in the value of investing in their homes.
With the decline in demand, contractors have less work and are easier to find — at more competitive rates, say builders, so, if you have the money, now is a good time to spend it.
John Darling is a freelance writer living in Ashland. E-mail him at email@example.com.