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Dick Turpin

Home Improvements in '85 Set Spending Record

August 17, 1986|DICK TURPIN

Our nation of tinkerers and hobbyists, usually willing to try their hands at anything that moves, spent unprecedented amounts of money last year on existing homes.

Those not wanting to move from their present dwellings--and almost certainly into a higher property tax bracket--are staying put and remodeling their homes at a record pace.

The very affluent, too, are on a remodeling binge, as reported in this section last week. Almost recklessly, they seem to be buying up choice but old properties throughout the Westside and tearing them down to build their own particular dream houses.

Spurred by this year's surge in real estate activity and the availability of home loans at comparatively affordable rates, first-time home buyers usually want to touch up their newly acquired and biggest-ever purchase.

And it's pretty rare for any family moving into another house, a new or an existing dwelling, not to want to fiddle, tinker, add, subtract, or blend something or other into the new abode.

Whether a household is moving out, up or down on its respective space-need scales, some sort of remodeling or fixing-up invariably takes place.

Figures just issued by the National Assn. of Home Builders show that Americans spent a record $80.3 billion last year in improving and repairing their dwellings.

Do-it-yourselfers accounted for 25% of that work, while professionals in the business did the bulk of remodeling, said David C. Smith, NAHB president, who expects even a bigger amount to be spent on remodeling this year.

The highest quarterly figure ever recorded, $90.6 billion on an annual basis, was reached during the last quarter of 1985, he said. The 1985 total represented a 15% increase over 1984 expenditures.

Over a four-year span, remodeling activity throughout the nation jumped by 78%--from $45 billion in 1982 to the $80.3 billion mark.

The pace of sales this year in the new and existing home markets will assure another record, Smith predicted.

"Typically, when a family buys a home, they make a number of improvements or alterations," he said.

The 1985 remodeling data, compiled by the U. S. Bureau of the Census, indicated that 22% of all home improvements involved maintenance and repairs, representing a 23.5% jump in major replacements (for example, a new roof or furnace) and a 34% drop in additions.

Such additions represented the smallest amount of the money spent over the 1982-1985 span and major replacements were the next least active segment in remodeling. Alterations to structures ranked second in dollars spent, after maintenance and repairs.

In the single-family home remodeling category, there was a small increase of 9% between 1984 and 1985, from $46.6 billion to $50.8 billion. In the multifamily remodeling category, there was a greater increase, 27%, from $23.2 billion in 1984 to $29.5 billion last year.

Smith guessed that the marked increase in the now more competitive multifamily housing field may stem from anticipation by owners that the pending tax reform measures will not treat their properties as kindly as before. Therefore, Smith said, many owners may be fixing them up to sell them.

His association, reasoning that tax reform is bound to affect the apartment house industry, expects about an 18% drop in such construction this year.

"Under tax reform, various tax incentives that attract investment capital to the rental housing market will be eliminated. Without that investment capital, construction will decline and rents will go up," the building executive said.

But otherwise, single-family home building will increase, remaining as the brightest spot in the country's sluggish economy, Smith said. During June, new single-family homes were started at a vigorous annual rate of 1,223,000-million, down 2% from May but up 18% from June of 1985.

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