Homeowners choosing to reemodel

January 13, 1991|By Edward Gunts

Homeowners are choosing to stay put and tap their equity for home improvements as a slow-down in home price appreciation and mounting recession fears discourage them from trading up to a new home, according to the general manager of Advanta Mortgage Corporation's West Bethesda office.

"With the uncertainties in the housing market and state of the economy, home improvement has become a significant reason why consumers are looking to a home-equity loan, said Colleen Hutchinson, Advanta's general manager.

"Perhaps it's more advantageous for a consumer to do a major homeimprovement -- an addition or a remodel -- than it is to go out and steup-up in the marketplace to higher mortgage payments and, in most cases, higher property taxes," she added.

Ms. Hutchinson said Cahners Building and Construction estimatestotal residential remodeling outlays will jump 9.6 percent for 1990, up from a 3.4 percent gain in 1989. The amount of money spent specifically for additions and alterations is expected to rise 11.4 for 1990.

According to Cahners, kitchens and bathrooms remain the most popular home improvements, together accounting for more than 60 percent of all remodeling planned for 1990.

According to Qualified Remodeler, a trade publication, the median price of a remodeled kitchen in 1989 was $11,888 and the "value added" was about $3,000. A remodeled bathroom cost an averge of $9,193, of which the homeowner could add about $2,000 to the home's price.

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