With one daughter at home and another on the way, Fulton residents Sean and Kim Sweeney could have bought a new house in the area. But it would have approximately doubled their mortgage, Sean said, and gotten them just 300–400 additional square feet of space.
So instead, the Sweeneys decided to renovate their 1,700-square-foot bungalow, adding several bathrooms, renovating the basement, redoing the upper level and kitchen and adding a new garage, siding and a roof. The renovation ended up doubling the couple’s mortgage, but it gave them an additional 1,200 square feet.
“Lo and behold, we basically have a brand-new house at the end of the day,” Sean Sweeney said.
As the housing market stays tight, some Southwest Minneapolis homeowners, like the Sweeneys, are turning to renovations or rebuilding projects instead of buying new. They say the love what the area has to offer, such as the schools and the parks, but haven’t found success finding a new home that fits their needs.
“A lot of people are stuck in the market,” said Todd Shipmann, a relator for Lakes Sotheby’s International Realty and a past president of the Minneapolis Area Association of Realtors.
The inventory of homes for sale in the Twin Cities metro was down 27.5 percent at the end of 2017 compared to the end of 2016, according to the association. In Minneapolis, houses were on the market for an average of 43 days in 2017 compared to 54 in 2016.
That crunch has factored into some families’ decisions to take up renovation projects. Sean Sweeney, for example, said he thought his old house was great but that certain features made it tough, such as the fact that they couldn’t open the dishwasher and refrigerator at the same time. He said he and Kim looked around the Southwest area for approximately six to 12 months before embarking on their renovation project.
Lynnhurst resident Steve Jewell said he and his wife did a preliminary look at the market in 2016 before renovating their rambler. Jewell said they realized they would have a hard time finding the features they liked in the house at the same value.
The couple did renovations that included taking walls out, adding all new appliances and renovating the kitchen. Jewell said he’s happy with most of the work and that he expects to be in the house for at least another 10 years.
David Siegel, executive director of the Builders Association of the Twin Cities, said homeowners are doing bigger projects than in past years. His observation echoes national trends. HomeAdvisor reported last year that the average homeowner spent nearly 60 percent more on home projects from February 2016 to February 2017 than he or she did in the previous 12-month stretch.
About two-thirds of homeowners said they planned to spend the same amount or more on home improvements in 2017, according to HomeAdvisor’s report.
The report attributed the increase in home-improvement spending to a two-fold increase in homeowner equity over the previous five years and the overall rise in home values. It said baby boomers and millennials were leading the charge when it came to spending on home improvement.
Siegel said bathrooms are no. 1 and kitchens are no. 2 when it comes to the most popular remodeling projects. He said a problem now for builders is a shortage of labor, adding that a lot of young people are not going into construction.
East Harriet resident Ethan Johnson, owner of EK Johnson Construction, said it’s a busy time for him and a majority of other contractors he’s talked to.
He reiterated the sentiment that people are spending more on projects, and he added that he doesn’t hear much about people who are doing a project with the intent of selling quickly compared to when he first started.
“It’s definitely a good market,” said Johnson, who does the majority of his work in South Minneapolis.
Johnson said that it’s becoming easier for people to invest in their own home, with the value of real estate increasing so much. He said he could be doing more work with the amount of leads his company is getting but that it’s not simple to grow with a lack of workers.
Taking the plunge
Greg Schmidt, founder of South Minneapolis-based Home Restoration Services, said he’s seeing a lot of interest in renovating basements, bathrooms and some desire for mother/father-in-law apartments.
He, too, said people are doing more expensive projects and added that he tries to make sure his clients are aware of timelines for the project, noting the labor shortage.
Schmidt said that if he were advising a homeowner, he would tell them to look carefully at online profiles and online reviews. He added that it’s important to make sure the builder is acquainted with the style of house he or she is remodeling and that he or she should have an ability to build any type of project.
Sweeney, the Fulton resident, said renovating isn’t as simple as just hiring someone to do it. He encouraged prospective remodelers to be very realistic about the cost and the timeframe and to look at multiple architects and builders and get references for both.
He also said it’s important to get one the same page as your spouse and partner about the renovation.
“Going through a remodel can be stressful as far as you don’t realize all the decisions you have to make,” he said.