Memphis Remodeling Market Continues to Improve

LANCE ALLAN

The Daily News

Last summers major wind storm was devastating for Memphis.

But it did wonders for the areas remodeling market, which saw a heavy increase in business.

I think (the year) ended very strong because of the unfortunate circumstances of the storm, said Mike Sinquefield, chairman of the Memphis Area Home Builders Associations Registered Remodelors Council and a principal with Sinquefield, Chamberlain & McCreery. Everyone I know in this business took on several additional tasks because of the storm.

People who normally dont do insurance repairs even got involved in that.

Strong showing. Industry statistics from MAHBA back up Sinquefields assessment. A third-quarter Remodeling Market Index, based on a survey of industry professionals, showed year-over-year gains of 3.7 points for current market conditions and 6.7 points for future expectations.

It looks like its going to be a strong first quarter, Sinquefield said. Everybody seems to be positive going in. It looks like the economy is on the upturn and everybody is willing to turn over some dollars to remodel.

The storm helped feed that scenario. But for some, including John Catmur of Catmur Development Co. Inc., business picked up before the storm.

All in all, it was slow in the spring for me and then before the storm hit, things really opened up, he said. The storm just added more work. Ever since the storm, things have been pre-9/11.

Sept. 11 effect. Business for Catmur before the terrorist attacks of Sept. 11, 2001, was excellent, with $4 million in total yearly sales, he said.

Now, its close to $1.8 million in sales, he said. Prior to (Sept. 11), it was a 10-year run of great sales.

Sinquefield said people guarded their money much more carefully following the attacks.

It took a while to recoup from that, because when that happened, people started losing money in the stock market and didnt know what the future of the nation would be, he said. They actually canceled contracts because they didnt know where all that was going. It was probably six to nine months that followed that our industry suffered, but after that it really picked up, especially in the last year.

Improved cash flow. Part of the recent pickup springs from low mortgage interest rates and a rebounding economy. Because many homeowners are refinancing their mortgages, they have been able to use the extra cash for home improvements.

People refinance their homes and they choose to do a remodel or renovation or an addition because of those low interest rates, Sinquefield said. People like where they are. They get tied to a piece of property.

Some people like to move up and some people like to fix up what they have, and thats what we ran into this summer. There are a lot of people willing to do that.

Investment options also are improving, meaning cash is easier to come by, one contractor said.

I think just because people begin to see the economy improving, it all ties together, said Eric Meyers of Meyers-Bradick Associates. When your home value goes up and when your investments start to perform, with the level of work we do, people arent financing the work. People are paying cash for this stuff.

They see their investments start to perform, they say now is the time, because suddenly the money is there again.

High-dollar renovations. Faye Cook, owner of Memphis Home Improvement Co. Inc., said she has seen higher-priced projects in recent months.

This past year has been fabulous, she said. Weve done some of the largest projects weve ever done. People arent moving theyre adding on.

Cook has done several second-floor expansions in homes that were built with unfinished rooms.

I think its going back to the trend of the 60s and 70s, she said. Theyre just updating homes.

Popular projects. The hot jobs have been kitchen and bathroom upgrades.

People like to do those because thats really a big living space for people, Meyers said. People living in the older houses, built in the 40s, 50s, 60s, 70s, those houses have bathrooms that are generally about 5 feet by 8 feet, and its nothing more than a tub, a sink and a commode.

Homeowners are also enlarging kitchens to create friendlier environments.

These old houses, the kitchens are tiny, Meyers said. When you get five people in the kitchen, you cant move around. Its the same thing with master baths. Theyre very luxurious now. They have Jacuzzi tubs and the big two-person showers, luxury finishes and low maintenance.

Minor adjustments are being made in interior finishes, and homeowners are upgrading to new products and styles. Barry Shaw of Highland Systems said his countertop business grew by 15 percent in 2003. He expects that growth to continue in 04.

Holiday break. Sinquefield said late spring and summer tend to be the busiest times of the year for the remodeling industry. In the fall, business slows down due to the approaching holidays.

Very few people want you to start tearing out their kitchens right before Thanksgiving and Christmas, so theres always that slow period, he said. January, February, March, youve got people going to the home expos and shows, and then late spring theyre ready to go.