Bay Area Home Remodeling Including Bathroom and Kitchen Remodeling in Los Altos, Los Altos Hills, Palo Alto ...

Greetings!

Happy New Year! This time of year often brings reflection on what has transpired throughout the year and hope for what can be in the new year. We wish you and your family all the best in the coming year.

Ring out the old, ring in the new,
Ring, happy bells, across the snow:
The year is going, let him go;
Ring out the false, ring in the true.
~Alfred, Lord Tennyson, 1850

The full effects of the global financial crisis of 2008 are yet to be seen. While the credit-crunch caused by the burst of the sub-prime mortgage bubble is considered the primary cause, other factors propelled the crisis to global proportions. Speculation in the commodities market spurred energy to its highest prices ever. In the period leading up to the collapse, unemployment and bankruptcy were rampant. In fact, during that time, two of our customers, both long term (15+) year employees of local high-tech companies, lost their jobs in the middle of large remodeling projects. The declining value of the dollar abroad and inflation at home further weakened the economy and by late summer, the number of home foreclosures and housing loan defaults forewarned that the United States’ economy was about to collapse.

The federal government’s buyout of lenders Fannie Mae and Freddie Mac failed to rectify the situation and within weeks, Wall Street investment banks were on the brink of collapse. Congress approved a massive, $700 billion economic package to rescue the failing banks, hoping to avoid a nationwide depression. While it brought some stability to the market and avoided a nationwide depression, at least temporarily, it has not yet reversed the negative economic trends and the remodeling industry has been especially hard-hit. Let’s face it; remodeling is, in most cases, a nice-to-have luxury and not a necessity. Unless your home is damaged in a fire or natural disaster, or your roof is leaking, remodeling is not imperative. That being the case, remodeling has come to a screeching dribble. We have it from a reliable (though not official) source, that in 2010, approximately 200 building permits were issued in Los Altos – down from the 2,000+ issued in recent prior years.

And, while we are receiving the same number of leads, whether it is the realistic fear of a job loss, the inability to obtain financing, or apprehension about the shaky state of the economy, most would-be remodelers are watching from the sidelines to see where the market will settle. Or worse yet, they are choosing to proceed with a low-ball bidder who gave them a price that is 50% less than it will actually cost to build their project – a game we have chosen not to play – but that’s another story. Underpinning all of these fears, whether conscious or not, is the awareness that something profoundly wrong was at work in the highest levels of power in our nation and there is no evidence that it has been exorcized. To the contrary, we think “it” was given a slap on the hand and big bonuses.

Images from MS Office free template library with rights granted

Remodeling magazine just released their annual Remodeling Cost vs. Value Report for 2010-2011 which compares the cost of various types of remodeling projects with their resale value. It provides data for the national averages and for specific regions of the country. At the peak in remodeling value in 2005, the national average percentage of recouped value for all types of projects was 86.7%. This year, the ratio has dropped to 60%, reflecting the instability in the national real estate market due to tight lending practices and uncertainty over foreclosures and distressed properties. Keep in mind that these numbers are driven by the cost of remodeling and the value of homes in all markets.

In our local area, where housing values have remained more stable, the return on remodeling costs is much higher. Some types of projects recoup over 100% of the value when the home is sold. An entry door replacement that cost $1,546, will return $2,029, or 131.30% of the cost in resale value. Similarly, a bathroom remodel that cost $22,014, will return $22,440, or 101.90% of the cost upon sale. Major projects, such as additions and kitchen remodels, while they do not recoup 100% of the cost, are still able to recoup approximately 95% of the cost upon resale. Of note, these figures represent averages for good quality (not luxury) projects. High end projects with expensive finishes and fixtures recoup less overall than projects of good quality.

At the national level, the first 10 places in the ranking are held by 13 projects (includes ties.) It’s a sign of the times that 10 of them are exterior replacement projects such as windows, doors, and siding. Replacement projects have always performed better in resale value than remodeling projects, partly because they are among the least expensive and partly because they are need-based improvements that contribute to the home’s curb appeal and protect the owner’s investment. To read the full article and view charts for all types of remodeling projects and areas of the country, see the Remodeling 2010-11 Cost vs. Value Report on the Remodeling magazine website.

Greetings!

It’s supposed to be “The Most Wonderful Time of the Year” a time of building family traditions and sharing joy. But somehow “peace on earth” morphs into “Run to the shopping center, wrap one more present, and scream at the kids” when holiday pressures and expectations are too much. Our wish for you is to enjoy the simple pleasures of Christmas and to give the gifts of grace and patience to your family and friends, especially when it is hardest to do so.

Some extended families live together year around, and it isn’t always comfortable for everyone. Keep reading for some remodeling ideas that can help multi-generational families live happily together in the same home.

The traditional empty nest syndrome is increasingly giving way in this country to the “crowded nest syndrome.” This term refers to the stress that results when adult children unexpectedly return home — usually for economic reasons — to live with mom and dad, often bringing grandkids with them. Their homecoming may coincide with the arrival of elderly great-grandparents who need special care.

Having a home that provides privacy to the individual members of a multi-generational family is very helpful in keeping the environment harmonious. A bonus room, attic or basement can be converted into an entertainment/rec room for the younger set where their exuberance will not disturb others. Transform a garage or unused sunroom into a grandparents’ suite with a private sitting room, bath and mini-kitchen on the ground level. By staying within a home’s existing footprint, these projects are more economical than additions.