Cover story: Remodelers build on spark of recovery

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By Lisa Rauschart SPECIAL TO THE WASHINGTON TIMES

Drive around the neighborhoods of the greater Washington area and you may literally see more signs of economic recovery. Bright yard signs announcing a new roof, windows or an addition used to be ubiquitous just a few years ago. The signs, along with the remodeling jobs, are few and far between these days.

According to the latest National Association of Home Builders' (NAHB) Remodeling Market Index (RMI), the residential remodeling market showed signs of improvement during the first quarter of 2009, although the numbers still indicate that the majority of remodelers view market conditions as less than favorable.

"Conditions remain below average and are down slightly from this time last year," says David Crowe, NAHB chief economist and senior vice president. "The gains over the last quarter and improvement in market expectations suggest a spark to the start of recovery in the remodeling market."

If you're trying to sell a home, it may be a good time to make some improvements.

"When you've got lots of similar houses for sale," says Gopal Ahluwalia, NAHB vice president for research, "the one with new siding will be the one that stands out. It's no guarantee - but curb appeal is definitely a factor, given the state of the housing market."

Things were certainly better for remodelers during the housing boom, but the remodeling market is actually doing better than the housing market now. According to the National Association of Realtors (NAR), the overall housing market declined 7 percent in the past year while the home-remodeling market dipped just 3.86 percent between 2007 and 2008.

Meanwhile, Remodeling magazine's 2008 "Cost vs. Value Report," produced in conjunction with NAR, found that homeowners can recoup value from their home-improvement investments. The report estimates the percentage of investment homeowners can expect to recoup for a variety of different projects, from using fiber cement siding (86.7 percent) to adding a home office (54.6 percent).

On average, homeowners can expect to recoup a little more than 67 percent of their investment. That's down from recouping an average of nearly 87 percent of the investment during the height of the housing boom, but it is still an indication that an improved home is better than one with no improvements at all.

Still, experts caution that any home improvement should be done with an eye toward improving lifestyle - not necessarily for improving market value.

"These days, home improvement as investment is a secondary factor," says Walter Molony, an NAR spokesperson. "Most are lifestyle improvements."