Boom times for remodeling work in Sonoma County

Sonoma County’s tight housing market is giving a boost to an already healthy home remodeling sector.

A limited inventory of homes for sale is causing significant numbers of middle-aged and older homeowners to stick with their current properties and hire contractors to make the houses more livable, according to builders and home improvement retailers. That means kitchen and bath remodels, as well as room additions.

“I can’t buy a new house, so I’m going to fix up the one I have,” Mead Clark Lumber vice president Jeff Scott said in explaining the homeowners’ thinking.

This trend of staying put comes at a time when even those wishing to build their dream houses instead are considering older home purchases and renovations. Sebastopol contractor David Leff said when you add in the costs of land, basic infrastructure and building-related fees, it typically costs more to build a new house than to buy an existing one and remodel it.

Find a property in the right neighborhood with desirable views and surroundings, and “the easiest thing to change is the house,” said Leff, owner of Leff Construction Design Build.

The remodeling sector is enjoying strong growth around the nation.

“We’re sort of in our boom years right now for home renovation,” said Nino Sitchinava, economist at Houzz, a Palo Alto-based online platform that connects homeowners with remodeling professionals.

The Bay Area is seeing a bigger share of additions than the rest of the country, Sitchinava said. Also, the region’s owners are experiencing “this overwhelming propensity to stay in their current homes.”

“People are not trading up homes as much as in the past,” she said.

The remodeling sector has been expanding for over six years. The Joint Center for Housing Studies of Harvard University in July predicted that remodeling expenditures will rise 6 percent in the coming ?12 months to $324 billion.

“It has been growing faster than the economy coming out of the recession,” said Kermit Baker, director of the Harvard center’s Remodeling Futures Program.

In a sign of the times, Home Depot this month reported record quarterly sales and earnings. Same-store sales for the home improvement company increased 6.6 percent from a year earlier, a result that analysts noted stood in stark contrast to the lackluster earnings of most brick-and-mortar retailers.

Strong sales also are reported from both Mead Clark in Santa Rosa and Friedman’s Home Improvement, with four stores in Sonoma and Mendocino counties.

“This will be our best year since the downturn,” said Friedman President/CEO Barry Friedman, referring to the recession of 2008-09 and its aftermath.

For both remodeling businesses and suppliers, “everybody’s busy,” Friedman said.

The sector is benefiting nationally from large numbers of older homes in need of upgrades, rising home equity and strong consumer confidence in both the economy and the housing market.

The county’s median single-?family home price has more than doubled since housing prices hit bottom in early 2009. In July, the median reached a record high, not adjusted for inflation, of $644,000.

But the local market typically has only a two-month supply of housing inventory, a level considered to benefit sellers over buyers.

The lack of choices and the resulting competition is keeping significant numbers of aging baby boomers from downsizing to smaller places, according to both real estate brokers and those in the remodeling businesses. The tight market also is blamed for holding back middle-?aged Gen Xers from moving up to bigger digs.

“If they want to stay in Sonoma County, they’re going to stay in the house they’re at,” said Mike Montague, an owner at TeeVax Home Appliance and Kitchen Center in Santa Rosa.

One result is that those who remodel often treat themselves to slightly nicer features, with the thought that they will enjoy the upgrades for a long period of time, Montague said. The homeowners pick out stainless steel appliances over standard colors and choose quartz counter tops over low-end granite ones.

“They want to buy a little bit better quality,” he said.

A February report by the Harvard Joint Center for Housing Studies predicted healthy growth for the remodeling sector for the next decade, with annual sales increasing about ?2 percent above inflation.

Remodeling will be spurred largely by middle-aged and older homeowners. Those households drive renovation work because they have typically higher incomes and bigger savings than younger couples.

Looking forward, the Harvard report said a major question is whether the remodeling sector will face a slowdown in the coming decades when older homeowners are replaced by millennials, those born between 1982 and 2000.

Because of the recession and the housing crash, millennials are getting a later start in home ownership, according to the report. In 2005, those under age 35 comprised 43 percent of the nation’s homeowners. By 2015, that rate had fallen to a historic low of 31 percent.

However, younger owners such as Guerrero and Alyssa Lopez of Santa Rosa also have undertaken remodeling their home. As with older households, the couple saw the work as a way to take what exists and turn it into something that better meets their needs.

“We can’t afford that big fancy house,” said Guerrero Lopez, 27, a Santa Rosa firefighter. Instead, they found “a diamond in the rough” in 2014 and spent two years transforming it.

The three-bedroom, two-bath house in the Larkfield Wikiup area was three decades old and in need of new flooring, baths, windows and kitchen appliances. The couple, who now have a 7-week-old daughter, did much of the work themselves but hired professionals to texture walls, paint the exterior and handle some electrical and plumbing jobs.

The remodeling meant moving a mattress from room to room as the work progressed, Lopez said, but the planning and materials selections allowed them to make the home more their own.

“We got to decide everything,” he said.

Many suggested that this year’s remodeling business might be even stronger if not for the difficulty of finding workers. Experts said the remodeling sector is suffering at least as bad as the overall construction industry when it comes to a shortage of trained hands.

“Finding good labor is very difficult, especially in our neck of the woods,” said Rudy Hassid, president of the North Bay chapter of the National Association of the Remodeling Industry.

Hassid, who works for Floortex Design based in Corte Madera, said many construction workers find the Bay Area an unaffordable place to live and often come from Sacramento and other distant points to jobs in this region.

The shortage and the strong consumer demand have led to delays in starting projects both here and in metro areas around the country. Sitchinava, the economist at Houzz, said the company’s surveys with contractors report backlogs of work for up to 14 weeks in parts of the Bay Area and about three months in Sacramento.

“We expect that backlog to continue throughout the year,” she said.

You can reach Staff Writer Robert Digitale at 707-521-5285 or robert.digitale@pressdemocrat.com. On Twitter @rdigit.