The bathroom makeover into a spa-inspired retreat will have to wait.
Homeowners will tighten spending on home improvement projects this year, predicts a new report.
Spending on home remodeling and improvements will total $175.6 billion by the third quarter of 2008, a 2.6 percent decline from the first three quarters of 2007, according to Harvard University’s Joint Center for Housing Studies. Consumers spent $175.6 billion on remodeling last year, down only 1.2 percent from the $177.7 billion expended in 2006.
Experts say stricter credit standards, falling consumer confidence and the housing market downturn are curbing consumers’ appetite for major home upgrades.
Local remodelers expect this year will be slower, as consumers have become more cautious with their money. Some remodelers who were accustomed to handling large room additions and other big jobs are taking on smaller repairs.
“Before, you could pick and choose your jobs. Now you can’t. It’s a little bit tighter now,” said Ronald E. Langell, owner of R&L Remodeling in Westford.
Langell typically has a six-month backlog of projects to complete. The backlog is down to two months.
While significant bathroom and kitchen remodeling projects were common two to three years ago, these days consumers are focused on general upkeep and smaller repairs, such as replacing roofs or rotting wood trim, he noted.
Consumers aren’t as eager to pour money into major home improvements because of sinking home prices and sales, according to some analysts.
“It’s not that people aren’t fixing up their kitchens and bathrooms. They’re just not doing as many $100,000 and $150,000 projects. They’re doing more $20,000, $30,000 and $40,000 projects. I think people are nervous about putting too much money in their house at a time when house prices are uncertain,” said Kermit Baker, director of the Remodeling Futures Program at Harvard’s Joint Center for Housing Studies.
Langell agreed that some homeowners are putting large room additions on hold. “Why put a big addition on if you’re not going to get your money back?” he said.
But Langell said remodeling activity in some of the more affluent suburbs closer to Boston, such as Concord and Carlisle, is still brisk.
“The luxury market for anything Â… has stayed pretty strong,” said Finley Perry, a remodeler who specializes in high-end remodeling. “That market doesn’t seem to be affected by a credit crunch.”
Perry said his Hopkinton-based company, F.H. Perry Builder Inc., saw a 70 percent jump in sales in 2007 compared to 2006. The company started two whole-house remodeling projects in Cambridge and one in Boston last year, he said.
“We didn’t seem to be affected by the market issues,” he said.
