With interest rates at their lowest levels in decades and new home prices rising steadily, more and more homeowners are thinking about home repair and renovation
The story makes Christine O’Brien chuckle every time she retells it: O’Brien, a real estate agent for Coldwell Banker Pacific Properties, had just sold a fixer-upper in Niu Valley to a young couple. The wife liked the floor plan of the house. The husband was pleased with the size of the lot. Both appreciated being closer to work and other family members. However, the home had been nearly destroyed by termites.
“You’ve got quite a job ahead of you,” said O’Brien referring to the extensive repair work that was needed.
“I’m approaching this project with a Zen-like attitude,” said the homeowner with a faraway look in his eyes.
With interest rates at their lowest levels in decades and new home prices rising steadily, more and more homeowners are getting meditative about home repair and renovation. Accord-ing to the National Association of Home Builders, 2002 total consumer expenditures for remodeling reached an all-time high of $169 billion, a 6 percent increase over the previous record in 2000 of $159 billion. In Hawaii, re-modeling work is moving at an even faster rate. In 2000, the City and Coun-ty of Honolulu’s Department of Planning and Permitting issued 4,840 permits for additions, alterations and repairs. The permits had an accepted value of $78.8 million. In 2001, the number of permits increased 12 percent to 5,508 with a value of $88.2 million, an 11 percent increase over 2000.
“People can’t afford a new house in a neighborhood that they wish to live in,” says Geoffrey Lewis, an architect. “The bottom line is that there are a lot of older homes in Honolulu and not a lot of open lots.”
According to the U.S. Census, Honolulu homes may be in serious need of some upgrading. More than 53 percent of the city’s homes were built between 1960 and 1980. San Francisco, in comparison, has only 16 percent of its homes built during this time period. “We have a lot of shag carpeting out there,” says O’Brien.
Lewis, who opened his one-person firm in 1997, has seen business increase steadily every year. In 1997, 90 percent of his work involved de-signing new homes with the remaining 10 percent taken up by remodeling jobs. Today, he splits his time evenly between designing new homes and redesigning old ones. His jobs range from $30,000 kitchen renovations to $2 million transformations. But whatever the scale of the project, Lewis says that renovating, especially adding on, is substantially cheaper than re-building or buying new.
“A demolition and rebuild of a house can be double or even triple of the cost of an extensive remodel,” Lewis says. “Whatever the budget of the client, it comes down to getting the most out of what you can afford.”
O’Brien believes that the remodeling boom is occurring mainly in areas from Pearl Harbor eastward and on the Windward side of the island in Kailua and in Kaneohe to a lesser extent. Generally, she sees most major renovation projects in properties that are valued at less than $400,000. She also believes that this activity is closely linked to a trend in Oahu real estate over the last several years: A marked increase in the number of buyers who are trading in larger, more comfortable digs in the far-off suburbs for smaller, more conveniently located homes, trading living space for quality time.
“A lot of them are tired of driving, and they’ll take a home in Aina Haina or Niu Valley in which they have to do a substantial remodel,” O’Brien says. “They just kind of sigh, start in and get a little Zen-like.”