If you can’t move, renovate. If you don’t want to move, renovate. With an increasing inventory of high-priced, but rapidly aging homes and competition from new homes for sale on the market, median sale prices for homes built more than 10 years ago remains stagnant for homes in the Phoenix, Scottsdale and Paradise Valley markets. With most owners of high end homes not wanting consider a price reduction, the home renovation business is booming is home sellers aim to increase the value of their home for sale.
“We aren’t talking homes from the 1970’s that have shag carpeting and popcorn ceilings,” said Bob Kapci, a Partner with Square One Construction, a luxury renovation company in Scottsdale. “The homes that are saturating the market and unable to command their listing price are mostly homes built in the 1990s and 2000s that have distinctively outdated features, finishes and design elements,” he said.
The demand for renovations is increasing both in the sales of high end homes, as well as ‘starter’ homes that typically attract a first-time homebuyer. Square One Construction is a new luxury renovation company specializing in interior and exterior renovations of high-quality but outdated homes that have quickly saturated the Scottsdale/Paradise Valley market.
Home remodeling hit an all-time high in the first quarter of this year, according to Metrostudy.com’s national “Activity Index.” The index is up 4.5 percent compared with last year.
“The current strength of the remodeling market can be attributed primarily to economics – low mortgage rates, strong existing home sales, the bull stock market run, good job gains and now more recently, wage gains,” said Mark Boud, chief economist at Metrostudy. “With housing affordability an issue in many markets across the country, millennials will be more inclined to purchase older, more-affordable, existing homes that will necessitate renovations.”
“One type of home that we are seeing a huge demand for renovation work in the luxury market is the Tuscan style homes that were extremely popular in North Scottsdale in the early to mid 2000s,”said Kapci said. Kapci is also a leading agent with Sotheby’s International Realty and specializes in the sale of high-end Scottsdale and Paradise Valley homes. “Homeowners are often shocked that their custom home they build 15 years ago is already outdated, but the good news is that we can transform even the most heavily ornate Tuscan home into a home that is transitional and modern in nature and can command the price they hope to sell it for,” Kapci said.
With 75 years of building and real estate experience, Square One Construction takes a strategic approach to increase the beauty, functionality and value of high-quality but rapidly aging homes.
“Many homebuyers are looking for a transitional and slightly contemporary look, not the Mediterranean or Tuscan look that dominates much of the existing home market today. More sellers are finding that they must renovate to the style buyers want in in order to stay competitive with the new construction product that reflects a more contemporary style,” he said.
A lot has changed in homebuilding since these homes were built, not only design-wise, but technology and efficiency-wise too. “These are multi-million dollar homes that at their height of popularity were the epitome of luxury and the style everyone wanted, and now we are redesigning these homes to remove the telltale Tuscan elements like arches, columns, niches and dark wood and lots of little rooms that were expensive to heat, keep cool and get WIFI. Fortunately, most of these homes were exceptionally well-built and the result of a quality renovation is not only a major aesthetic improvement, but it can help keep energy costs down and ensure the home operates more efficiently, ” he said.
In the Valley’s market, the renovation boom is attributed to real estate trends in other areas too. “One observation of the Valley’s renovation boom is that people simply don’t want to move,” said Bill Hubbs, Partner with Square One Construction. “People become attached to their homes and neighborhoods, and while their home might not be right for them in some ways, it still is in many others. “We want our clients to fall in love with their home again, or help them make the improvements so a homebuyer can fall in love with their home for the first time, he said.
Luxury homeowners who are looking to stay put are opting for home renovations that increase the size or enhance the value of the home like property additions, exterior refacing and landscape redesigns.
Market statistics show that a quality renovation can add upwards of 20% value to a home. This means that buyers can find fixer uppers at under market value when purchasing, or sellers could renovate to be able to ask top dollar when the home hits the market.
For more information about Square One Construction or to request a complimentary design consultation visit www.square1construct.com.
To view the latest home renovation and redesign projects by Square One Construction, visit their design gallery.