Limited Horizons Like the chicken and the egg, it’s hard to say which came first: stagnating real estate returns or economic unease. A clear outcome of both is mounting concern about the remodeling return on investment.
San Francisco remodeler Jeff King of Jeff King & Co. recently helped two upscale clients scale back major projects because of fear they wouldn’t recoup their costs if they moved in less than five years. One project was a matter of “rethinking the envelope” of the clients’ home to steal (rather than add on) more space for their garage and live-in child care provider. In the other project, King helped the clients identify less-expensive finishes. “It was really about, ‘let’s keep these finishes to the right level commensurate with the value of the place,’” he says.
“Everyone is concerned about marketability,” says designer Joe Gelletich of Custom Crafters, in Kensington, Md. He helps his clients balance the urge to splurge with the practical limitations of space and budget. Certain features are now “pretty much a given” for homes of a certain value, he says, such as granite counters, under-cabinet lighting, and dedicated cabinetry. “But they’re not likely to chop up their houses,” or do major additions, to squeeze lavish master suites or “great room”-style kitchens onto their small urban footprints.
To help clients trim costs without sacrificing quality, Gelletich finds that a little education goes a long way. “I often explain that if the price goes up, that doesn’t necessarily mean you’re getting better quality,” he says. “A $1,200 toilet isn’t going to flush three times as much as a $400 toilet.”
Trickle-Down Amenities Some high-end home builders have had buyers walk away from $100,000 deposits to avoid paying the top-of-market prices they were contracted to pay. Yet even as would-be buyers sit tight, they’re still thinking about those luxury home features and amenities. John McManus, editor of BIG BUILDER magazine (published by Hanley Wood), says popular trickle-down features include open-space environments, dual master bedrooms, his/her baths, kitchen-living blends, inside-outside harmony, and whole-house security/entertainment/lighting systems.
For remodelers, of course, it’s not always economically or physically possible to build these features into older homes. Capturing the idea is another matter.
In his $2.7 million spec remodel, Wright Marshall opted to forgo dual master bedroom suites in favor of carving out two small office “nooks” in the master bedroom. “I don’t see the need to have separate bathrooms, but I do think each person wants their own space,” he says.