By Eve Mitchell
WHEN IT COMES to remodeling, homeowners are more interested in green improvements like solar panels and energy-efficient windows over luxury kitchens and other high-end projects, according to a Wells Fargo & Co. survey.
Overall, 52 percent of homeowners on the West Coast, and 54 percent of homeowners nationwide, would like to make some improvements to their home, according to the third annual survey released Monday.
"Homeowners clearly want to make improvements to their home, an indication that they expect to gain a return on their investment," said Doreen Woo Ho, president of Wells Fargo's Consumer Credit Group, which makes home equityfrom Business 1
loans.
When asked to select among nine home improvement choices if given
$50,000, environmentally friendly choices topped the list, selected by 24 percent of homeowners on the West Coast and nationwide. Such projects include installing solar panels, energy- efficient windows and energy-efficient appliances.
Next came putting in a gourmet kitchen (14 percent on the West Coast, 12 percent nationwide), followed by a luxury bedroom suite or master bathroom (11 percent of homeowners on the West Coast and nationwide).
"We expected the majority of residents to select one of the options that would only be aesthetically pleasing, or would add size or value to their home," Woo Ho said.
The survey of almost
1,400 U.S. homeowners was taken in August, back when gas prices were very high, which could have something to do with the results that put environmentally friendly remodeling on top, said Mary Berg, a spokeswoman for the Consumer Credit Group.
Still, it shows homeowners are interested in remodeling that is easy on the environment, Berg said. "I do believe people are environmentally conscious, and that's showing up in the survey."
Over at V & W Patio Door & Window Co. in Berkeley, just about all of the replacement windows sold to homeowners these days are of the double-paned, energy-efficient kind, said John Victor, co-owner of the store.
"It's 99.8 percent," he said. "They are going for energy- efficient windows."
But while people are thinking about going green for remodeling projects, they probably will spend less green in the coming months.
Homeowner remodeling continues to show signs of cooling, just like the housing market, according to a report released in October by the Joint Center for Housing Studies at Harvard University. The $160.5 billion spent on remodeling during the last four quarters was up only 1.6 percent over the previous four quarters, said the report. A year ago, there were double-digit increases.
In the Bay Area, rising interest rates and lots of homes for sale are contributing to the housing market slowdown. The median price for all homes dropped 0.8 percent in September to $611,000, from $616,000 a year ago, while sales were off almost 30 percent, according to DataQuick Information Systems.
But despite the cooldown, the vast majority of homeowners are optimistic about what will happen with home values in the next 12 months, the Wells Fargo survey found. Some 63 percent of West Coast homeowners expect their own home's value to increase, 25 percent expect values to stay the same and 9 percent expect values to decline. The numbers were similar nationwide.
Nationwide, 8 out of 10 homeowners with an adjustable-rate mortgage -- which includes interest-only and option-payment loans -- have concerns about rising interest rates, the survey found. ARMs typically start out with lower payments for the first few years before resetting to a higher rate.
Of those homeowners with an ARM, 44 percent on the West Coast said they plan to refinance when their loans' interest rates reset, compared with 56 percent nationwide.
Nationwide, only 14 percent of homeowners in the Wells Fargo survey held an adjustable-rate mortgage. In the Bay Area, about 7 out of 10 borrowers last year had some kind of ARM, according to San Francisco-based LoanPerformance.
(c) 2006 Oakland Tribune. Provided by ProQuest Information and Learning. All rights Reserved.
