Some rise, others fall in home remodeling business

Higher home prices and new residential construction in Santa Maria are having mixed results on how many homeowners are able to perform remodels.

James Halsell, co-founder of Halsell Builders, said his company has experienced a recent surge in home remodeling projects during the last year.

Were probably up over 500 percent, Halsell said. We get at least two calls a week for remodels.

He said the spike is due largely to rising housing prices in the area between 2011 and 2013, the average sale price of homes and condominiums in the Santa Maria and Orcutt area rose from $227,000 to $290,000, according to data from the Central Coast Regional Multiple Listing Service.

As a result, homeowners have more equity that they can leverage into secondary lines of credit. Government-backed programs such as emPower Santa Barbara County loans can also help subsidize the cost of larger remodeling projects by providing customers with an extra $25,000 to make energy-saving improvements. Such loans arent tied to equity, he said.

Halsell said the average master bathroom remodel might cost about $35,000, while a kitchen project could be more like $65,000. However, Halsell Builders has seen more people coming forward lately looking to do projects integrating a master bathroom, kitchen and great room. Those ventures can run as high as $150,000 to 200,000, representing a significant percentage of the price of the home itself.

The reason more people are willing to make such large investments is that they are more confident in the real estate market, he said.

When equity is rising, people are more confident that itll keep rising, so people are more confident to put some money into their house knowing that their property value will keep rising.

Not everybody in Santa Maria is having the same experience, however. Greg Organ, branch manager of the local Ferguson Plumbing Supplies store, said his companys remodeling work has decreased recently.

(Our) remodel business has probably gone down between now and probably a year and a half (or) two years ago due to the new homes being built and the interest rates being down, Organ said. Kind of what weve seen is people selling their houses and buying newer houses.

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Some rise, others fall in home remodeling business