The residential renovation business could be headed toward a record year nationwide, according to the latest figures from the U.S. Census Bureau.
And local home improvement contractors and property management firms say they continue to find it difficult to keep up with demand for their services.
Census officials project total remodeling expenditures for this year will reach $169 billion, exceeding last year's record spending by 6 percent.
"The volume of existing home sales has been growing rapidly," said Stanley Duobinis, director of forecasting for the National Association of Home Builders.
"One of the things people do after they buy that dream house is fix it up. Very quickly they start ... making major changes within the house," he said. "So, a large volume of existing home sales implies that within the next year or two or three, we're going to get a lot of remodeling expenditures. And that's what has been happening."
Brett Schoolnick, president of Howard County-based Baywood Design, a remodeling company, has seen an increase in large-scale projects, ranging from $500,000 to $1 million.
"I think what people are finding in Howard County is they have townhouses for $300,000 to $400,000 and it would cost probably $1 million to upgrade to a single-family home," Schoolnick said. "So, they'd rather invest that money in remodeling than move. ... If they have a nice house, nice grounds and their kids like the neighborhood, it actually is advantageous to them to stay put."
Low interest rates, in addition to a strong housing market, also have spurred homeowners to pursue residential renovation projects. A refinancing boom has provided extra money to homeowners who have taken advantage of interest rates hovering near 6 percent this year.
Michael Hudson, a local property investor and home renovator, attributes much of the renewed interest in real estate and property investment to recent stock market woes as well as an increase in homeownership.
Most of Hudson's business centers on rental properties -- his own and those he manages for investors -- although he also works as a renovator for select clients.
"I'm much more focused on how long this market boom will last, and on what will happen a few years from now when things turn," Hudson said. "Will the houses that we own hold their value, or will the work we've done to improve them hold its value or not?"
He believes it will, given the strength of the home improvement business even in times of economic hardship.
Contractor Bernie Schulman recently learned the ins and outs of home renovation from a different perspective. For the past year, he has dedicated his time and business, Maryland Custom Craft, to renovating his own three-story house on Park Heights Avenue. It has been a labor of love, time and money, and has offered him a chance to see his own business through the eyes of a client.
Schulman and Hudson said they are inundated with business, but take on only as much as they can handle. Their clients are mostly friends of friends, referred by word of mouth.
As Schulman puts it, "All of my business is repeat and referral." Neither advertises, or plans to do so. Both are content maintaining small operations, enabling them to remain directly involved in the day-to-day projects.
As a homeowner, Schulman couldn't be happier with the renovations to his house that were a year in the making. A construction loan enabled him to hire his company to do the necessary work. "So, that allowed me to continue getting a paycheck, even though it was my house I was working on," he said.
He bought the house for $60,000 in December last year, and since then it has been his "main distraction." After spending $145,000 in renovations, he is nearly finished, and earlier this month he held an open house.
Although the property had been renovated in 1995, under previous ownership, Schulman felt obligated to return the house to its original grandeur, but with modern amenities.
Schulman warns homeowners of the inevitable cost of cutting corners. Hiring a licensed contractor is the first of many steps to ensuring a quality work product, he says.
"A lot of people like hiring unlicensed friends of friends or people who just give them good prices, but that's sometimes what you wind up with," he said. "You should go with a licensed contractor. The work, therefore, is warranted, inspected and built to code."
Further, Hudson recommended, "It's important to know something about your contractor, to have seen the work, to know people who have worked with the contractor." He warned that picking someone out of a phone book is a gamble, because you know nothing about the quality of that person's work.
Other experts also warned consumers to hire professionals and shop for the best deals.
"Shop everything you're doing. Look for affiliations of the people you're going to," said Thomas Shaner, executive director of the Maryland Association of Mortgage Brokers and the Maryland Association of Home Remodelors. "And be cautious."