The home remodel market is recovering in Colorado

Stuck day and night in homes that feel too cramped or dated, and with the option to flee to something better that is becoming increasingly restricted, more and more homeowners in the Denver metro and state are spending large sums on renovations and remodeling .

“When COVID hit, our home became our office overnight, it became a school. We moved our father-in-law in because we didn’t feel safe living where he was, ”said Gina Earles, executive director of Blue Sky Bridge, a nonprofit that oversees child advancement programs in Boulder County.

With five people huddled within the confines of the family home in North Boulder all day, every bit of space became important in ways it wasn’t before, she said. Deficiencies that the family once tolerated became irritating.

Work began early in the pandemic, with basement repairs due to damage from the 2013 floods that made room to add an apartment for her husband’s 90-year-old father, Tracy. Work went up quickly over the summer to update furniture, carpeting and paint, and window coverings, followed by a remodel of the main bathroom, which is still ongoing in 2021.

“We always thought our bathroom was out of date. It wasn’t a pretty room. We hated the tiles, the hot tub. We thought, why don’t we do that too? “Said Earles.

In April, Harvard University’s leading indicator of remodeling activity predicted that remodeling companies would see sales decline in 2020 and through 2021 due to the pandemic. However, by October the index showed unexpected strength and projected remodeling activity rose 4.1% in the first quarter of 2021.

“The remodeling market is recovering from the initial shocks caused by the pandemic as homeowners continue to spend a lot of time in their home adapting it for work, school and leisure,” said Chris Herbert, executive director of the Joint Center for Housing Studies at Harvard in the report.

Much of the initial surge was in home improvement projects, as anyone who’s been to a Home Depot or Lowes last summer or fall can attest. Local designers and contractors report a surge in larger and more complex projects and well beyond what the Harvard report predicts.

Judy Goldman, CEO of Design Studio Interior Solutions in Boulder, helped the Earles family with their renovations and said their company’s business had grown 80% over the past year. This year starts off strong as more people seek advice on a process that the pandemic has expanded and made more complicated.

“Because people are home so often, their home means something different today than they do,” said Goldman.

Early on, some people quickly realized that they needed to make better use of their homes for remote work and schooling. Others hit the breaking point after staring at worn floors, drab curtains, and outdated paintwork. Money that may have gone on family vacations has been used for repairs, while others have taken out home equity loans to finance interior refurbishments, exterior improvements, and kitchen and bathroom remodeling.

“We have 20 to 30 bathrooms,” Goldman said. “COVID-19 feels dirty to people. They feel clean in the beautiful bathrooms. “

Larger projects, including complete revisions and additions, are also enjoying increasing popularity. Toby Hertel, owner of AAA Home Improvements in Lakewood, specializes in projects valued at over $ 100,000. He estimates his sales increased 30% last year from 2019, even after taking a six-week hiatus to do new business during the spring lockdown.

“We are more than what we can do this year. We’re in good shape, ”he said.

Pat Minniear, CEO of Milo Construction in Boulder, said his company saw sales jump 50% in 2019 across a variety of home improvement and remodeling projects.

“Much of the work consists of people in existing homes who don’t want to move on. In 2020 everyone was stuck at home staring at the wall they hated and wanting to make changes, ”he said.

Rachel Ellis, the Denver Post

A new tub and shower were part of the renovation of their main bathroom at their Boulder residence by Gina and Tracy Earles, pictured on Thursday January 7th, 2020. All you need is glass doors to enclose your shower room.

Low interest rates and plenty of equity

In the early 2000s, when Tom Yoswa, a loan officer at Caliber Home Loans in Greenwood Village, began specializing in home renovation loans, the average loan amount was around $ 35,000. Now the average is closer to $ 125,000, reflecting both the additional home renovation costs in today’s market and the equity accumulated after a decade of home price increases.

According to an affordability study by, the median home price in Metro Denver has increased 82% since 2010. And while incomes did not keep pace, combined with much lower interest rates, they rose enough to keep the mortgage burden manageable.

Those low rates also sparked a buying boom that kept the stock of homes for sale in Metro Denver below 3,000 for the first time, a fraction of historical levels. Even if someone wanted to buy a bigger and better house, it won’t be easy to find one. This in turn leads to the fact that new entries are restricted and a vicious circle of restricted inventory is created.

Yoswa specializes in so-called Fannie Mae Homestyle Loans, where the loan amount is based on the value of a home after a renovation rather than its current value. Loans can range up to compliant credit limits, which are close to $ 600,000 in Metro Denver.

While the interest rates are a bit higher than a traditional loan, someone with good credit can still get one for less than 3%, he said. And they are especially popular with borrowers who have been in their homes for five years or less.

Yoswa cites the example of a family who owed $ 280,000 for a $ 450,000 home but wanted to get the most out of a remodel that was expected to cost $ 250,000. That cost was higher than the equity of the property, but the Homestyle loan would make it happen.

Owners who have been in their homes for a long time and have built up a thick cushion of equity are also turning to home equity lines of credit or payout refinancing.

Borrowers taking out a Homestyle loan have a month to start work after they take out a loan and a year to complete. Therefore, it is important that they have a good handle on the scope and cost of the work and have a reliable design and construction team hired in advance, Yoswa said.

Rachel Ellis, the Denver Post

Gina and Tracy Earles worked together to build a new table for Gina’s pottery studio in the basement as part of their renovation projects during quarantine at their Boulder residence pictured on Thursday January 7, 2020.

Dust and delays

Before the pandemic, someone doing major remodeling could move in with relatives for a few weeks or rent a long-term residence. These days, someone who has bigger jobs to do is more likely to endure noise and dusty and masked workmen walking in and out of their homes while the kids watch the class and make a zoom call with the boss.

“Because of COVID, we didn’t have the luxury of moving out during this work and staying somewhere else. We don’t leave during the day, ”Earles said as the workers pounded in the background. But the contractor, Flatirons Construction, has been conscientious and respectful of the family’s concerns, she said.

Goldman said the ability to stay home all day while crews work can be a receipt for failure unless there is good communication between a client and the construction team. One of the tasks your company does for customers is to order the components they need, secure them, and store them in a warehouse so they’re ready to go when contractors need them. This has proven essential given all of the supply chain disruptions caused by the pandemic.

“There is a lack of standard materials that we were used to. It was a bit like the toilet paper, you think it will always be there, and then it isn’t. And it’s difficult to get around the problem, ”said Hertel.

Hertel said a sheet of OSB plywood, which historically cost $ 10 per sheet, rose to $ 30 at one point. He has a project that has been held up for weeks by a shortage of LED can lights. And good luck trying to find siding. Many types that were always available before 2020 won’t be in stock until March, he said.

Work teams cannot be scheduled on top of each other and must be staggered, and contractors get sick or have to be quarantined, which increases costs and can delay completion. Minniear estimates labor costs have increased by 15% to 20% since the pandemic.

“We suggest that people move out or move to another part of the house. It’s a major complication these days and we discuss it early in the process. How are we going to work through this remodeling? ” he said.

Make sure everything is decided in advance, he advises. About half of potential customers are turned away because they are not prepared enough and have not thought about what will require a renovation or remodeling, he said.

Jim Greer, who lives in Boulder, began renovating a historic 1910 home in the University Hills neighborhood in the fall of 2019 to deal directly with the pandemic. This resulted in months of time and additional costs.

“Plan for inefficiency in your budget. Your craftsmen won’t be as efficient as they were a year and a half ago, ”he said after completing a $ 300,000 remodel that he saved money by using Milo Construction to monitor it himself.

Approvals and inspections are taking much longer than they did before the pandemic, Greer said, telling the story of an inspector who was so concerned about the novel coronavirus that he would not get out of his vehicle and conduct his inspection from the curb.

Greer, who completed more than half a dozen renovation projects in the San Diego area before tackling his first historic home, can tick off a list of price hikes from memory. The cost of sawn timber and drywall has increased by almost half since 2015, and steel prices have also risen, so there is no escape from them.

Plumbing and electrical work is about 25% to 35% more expensive than a few years ago, and lights and faucets have increased by 25%, and thanks to tariffs, the price of washers and dryers has increased by 40%. And getting through a renovation project takes perseverance, determination, and most of all, patience.

“The house came out beautifully,” he said. “But I feel lucky to be done.”

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