The frenetic Whatcom County real estate market is having a ripple effect on anyone who wants to start a home improvement project this summer, as remodeling companies are scrambling to keep up.
Projects like as a kitchen remodel, which used to take weeks to get started, are now scheduled months in advance, local companies say. At Dreammaker Bath & Kitchen in Bellingham, owner Ron Faber said they are booked with projects into October. That hasn't happened this early in the year since he took over the business six years ago.
"The phones are still going crazy," Faber said. "It can be hard to predict, but right now I don't see this slowing down in the next year."
The upswing is obvious when looking at Bellingham's permit applications. City officials issued 96 permits for residential remodeling projects in the first three months of 2018. By comparison, the city issued just 46 permits for the same period in 2015, rising to 60 in 2016 and 79 in 2017.
A perfect storm of factors has led to this situation, many of them related to the tight real estate market.
With so few new homes available for sale in Bellingham, many local residents know that even though they can sell their home at a good price, it is challenging to find something to buy. Some people are choosing instead to improve their existing home, using that increased equity from property appreciation.
Since out-of-area homebuyers are finding it difficult to land a new home, they are opting to buy an older home and using leftover equity to remodel or even do a complete rebuild.
Those kind of projects have meant more business for companies like Bellingham Bay Builders. Dave Brogan, member-owner of the worker cooperative, said that overall sales volume on all projects is up 40 to 50 percent compared to a typical year. Projects have ranged from new decks to a complete rebuild of a house.
"We hear a lot from people moving to the area and saying how hard it is to find a new home," Brogan said.
Paulina Antczak sees both sides of the coin. As a partner in Fairhaven Floors, she has met many customers who are choosing to remodel rather than sell. As a Realtor for Brandon Nelson Partners, she is also working with clients who have to quickly decide whether to buy a home that goes on the market.
"I wish there was more of a balance" between buyers and sellers, Antczak said. "But what it means is that agents have to work harder to find the right home for someone. It can be done."
The home remodeling crunch also is impacted by the tight labor market in construction. Faber said he would like to grow and take on more projects, but he hasn't been able to find qualified carpenters to hire. He's even begun advertising outside Washington state, hoping to attract carpenters to move to this area.
Plenty of financing going into projects
The increased interest in home remodeling also is keeping people in the finance industry busy. Last year WECU funded more home equity lines of credit, called HELOCs, than any other year in its 82-year history and may top that in 2018, said Keith Mader, a program manager for the credit union.
In 2017, WECU funded 430 HELOCs for around $29 million. In the first quarter of this year, WECU has funded 107 of them for about $7.5 million. The credit union estimates about 75 percent of the HELOCs will be used for home improvement projects.
Along with rising home prices, interest rates are impacting the surge in remodeling projects, said Matt Berendsen, vice president of lending at WECU.
"Now that interest rates are rising, rather than going out and purchasing a more expensive home and locking in a higher rate, people are staying in their homes longer and improving them," Berendsen said.
What to do if you want to remodel a home
▪ Be prepared to wait, because contractors and subcontractors are busy through October. Some contractors might be able to squeeze a small project in between a couple of bigger jobs. If a home remodeler says they can get on a project right away, that could be a red flag, making one wonder why they are available, Antczak said.
▪ While you're waiting, get your financing organized. It shows the contractor that you're serious about doing the project. "If there's homeowner momentum behind the project, it will get more attention," said Brogan.
▪ Shop around. Even though there are currently more projects than companies can handle, it is still a competitive environment, Antczak said.
"There are so many great options out there," Antczak said.