Home remodeling activity increased by 22 percent in May from a year ago, marking the 19th-straight month of gains and rising to the highest level since BuildFax began tracking the data in 2004.

BuildFax combs through monthly building permit activity filed with local departments across the country. The company said that continued growth in these filings demonstrates that homeowners are still investing in their property, even as home values and prices continue to plunge.

“Through the first five months of 2011 we have seen impressive gains within the remodeling index and May has continued that trend with a record-setting month,” said Joe Emison, vice president of research and development at BuildFax. “Even with the continued struggles in the economy, the remodeling industry has been a bright spot, as consumers look to make upgrades to their current homes, rather than purchasing a new residence.

Read the full story on HousingWire.

Are you in the business of building homes or building better communities? Do you offer more than a “great” buy? Does your product help or hinder the environment? According to the third annual Edelman goodpurpose^TM Consumer Study your answer to these questions may just affect your future sustainability as a real estate builder, developer, contractor, remodeler, etc. The survey found that despite the recession, consumers are still spending with companies and brands that have a social purpose. New findings released from the survey of 6,000 people in 10 countries, revealed that during this recession, 57 percent globally say a company or brand has earned their business because it has been doing its part to support good causes.

“People all over the world are now wearing, driving, eating, and living their social purpose as sustained engagement with good causes becomes a new criterion for social status and good social behavior,” said Mitch Markson, Edelman’s chief creative officer, president of its brand consulting group and founder of goodpurpose. “This gives companies and brands associated with a worthy cause an opportunity to build long-term relationships with consumers that, in turn, allow them to feel valuable within their communities.”

The study also found that 83 percent of people are willing to change consumption habits if it can help make the world a better place to live, indicating a startling consumer shift and trend away from traditional status markers like big houses and luxury cars and toward identification with social purpose brands. Considerably more people (70 percent) would prefer to live in an eco-friendly house than merely a big house (30 percent), and 68 percent also now feel that it’s becoming more unacceptable not to make noticeable efforts to show concern for the environment and live a healthy lifestyle, with an overwhelmingly 80 percent preferring to support the livelihood of local producers.

“People are demanding social purpose, and brands are recognizing it as an area where they can differentiate themselves and in many parts of the world, not only meet governmental compliance requirements, but also build brand equity,” said Markson. “This year’s study shows that if companies respond intelligently to the sea change in consumer attitudes, brand loyalty among consumers – even during seriously challenging economic times – will actually grow. Even better, consumers will want to share their support for these brands with others.”

While the study reveals that social purpose is becoming increasingly crucial to a brand’s success, a brand purpose must be authentic and true to the core values of the brand itself, and brands must look beyond traditional corporate social responsibility programs in which they simply donate money to a good cause. As the study notes, 66 percent of people believe that it’s no longer enough for corporations to merely give money away, but that they must integrate good causes into their day-to-day business.

“Companies that become catalysts for social change and respond to rising consumer expectations that they and their brands help make the world a better place will not only survive, but also thrive, in ways their competitors will not,” said Markson. “Mutual social responsibility provides that opportunity, as people today are more passionately involved and supportive than ever, yet more demanding and unforgiving, as well.” These numbers would indicate those real estate builders, developers, contractors, remodelers and others who want to survive in this economy and those in the future would be wise to adhere to the behaviors of consumers who want social change and environmental awareness.

RealtyTimes.com

‘Twas only a few years ago, when the housing boom was in full roar, that homeowners didn’t have to fret too much over whether the money they invested in remodeling would be paid back at resale time.

Indeed, it was practically a no-brainer: Home sale prices were going up so high and so fast that remodeling the kitchen or the master bath would nearly pay for itself. Some remodeling companies had so much backlogged work that clients passed the time on waiting lists.

“These days, it’s a new ballgame,” said Sal Alfano, a former contractor who now is the editorial director for Remodeling magazine, a trade journal. “Now, the jobs are smaller, the scope of work has been cut back, and consumers are doing things in phases.”

And, he said, consumers are squinting harder at contractors’ estimates, not only to push down costs but also to decide whether the price of that redone kitchen or master bath is going to pay them back anything when it comes time to sell in a market that has become notoriously fickle and with home prices sliding.

Such born-again cost-consciousness makes complete sense in the current economy, Alfano said, but he’s concerned that the infatuation with the contractor who offers the lowest bid will come back to haunt consumers.

Each year, Alfano’s magazine partners with the National Association of Realtors to produce the Cost vs. Value Report, a massive numbers-crunch that tries to ballpark the return on investment for dozens of home-improvement projects, nationally and regionally, in addition to numerous metro areas, including Chicago.

It’s an ongoing slide, he said. Nationwide, the payback at sale on remodeling, in general, peaked in 2005 (the height of the housing boom) at 86.7 percent, according to the magazine survey of the remodeling industry and NAR members.

“That is,” he said, “it was costing you 13 cents on the dollar to build just about anything (if you were selling the house in a relatively short period).

“That’s pretty cheap,” he said. “Then it sank like a rock, ending up at 76 percent, or 10 points lower than the year before.”

In the 2009 survey, the average payback, nationally, was about 64 percent, according to magazine data.

That’s almost exactly the average for 33 remodeling projects analyzed in the Chicago area in the 2009 survey. Heading the costs-recouped list here were not the glamour kitchen/bath projects, but smaller-scale and more utilitarian jobs.

The best returns here, according to the report, were on midrange entry-door replacements (115 percent return at sale) and upscale fiber-cement siding replacements (85.8 percent).

The magazine extensively defines the parameters of each project, citing specific materials and overall price ranges, all gleaned from cost-estimating software used in the remodeling industry. In addition, this year 4,000 members of the Realtors’ group weighed in on how the improvements might pay back at resale in their local markets. The full report is at remodeling.hw.net.

A midrange major kitchen remodel in Chicago (average cost: $67,332) recouped about 67 percent at sale time. An upscale bathroom remodel here ($63,402) recouped about 50 percent, according to the study.

Despite the data, not all consumers are reining in and battening down, some remodelers say.

“For the people who have the ability and want to do a kitchen remodel, I’m not seeing them skimping,” said Bryan Nooner, chairman of Distinctive Remodelers in Orland Park.

“Pretty typically, we’re seeing kitchen remodels in the $40,000 to $70,000 range. They’re spending what they want to. They still want the granite (counters), they want upgraded wood-cabinet species such as maple or cherry, and we’re doing few standard wood stains — most everybody wants a hand-rubbed finish.”

One of his recent clients, Frank Toland, said resale value wasn’t a consideration when he recently remodeled the kitchen of his Mokena home. He said the job cost about $70,000, in addition to upgrades elsewhere in the house that were done at the same time.

“Resale really didn’t factor in at all,” Toland said. “We’re not planning on moving. We’re planning on staying there, and that’s why we decided to do it the way we wanted.

“We hope that the money we put in, eventually we’ll get it out. But we said, let’s do it the way we want it done rather than cut costs because of resale value.”

Matt Draus, who owns Descon Construction in Oak Park, also said he’s hearing from customers who are thinking long term.

“We see people who have a little bit of money and decide they’re not going to move for five years because of the real estate market,” Draus said. “But we’re not seeing the big blowout room additions.”

Instead, he said, he’s seeing smaller projects and more emphasis on maintaining and updating existing features.

But more so than in recent years, he said, money talks.

“Cost is definitely getting much more scrutiny now,” he said. “It’s all about cost, that’s a No. 1 priority.”

But Draus said that bottom-lining often seems to be coming at the expense of quality. Driven by the slumping economy, the remodeling-industry ranks are swollen with newcomers and some tradespeople who are eager to have any income at all, he said.

“I’m [offering estimates] against people who aren’t honest and upfront and are low-balling it in order to get the work,” he said. “There are a lot of good builders out there, but there are a lot of others who are making times harder for the rest of us.”

Alfano agreed, and urged homeowners to be cautious when considering bids that are significantly below competitors’.

“What we couldn’t account for [in estimating costs for the magazine study] was the number of jobs where the contractor cut his overhead or his profit just to keep busy, hoping that things would turn around,” Alfano said.

“Others are former new-construction builders who don’t yet know that they can’t really do a job for a large percentage less” than competing bidders, he said.

Draus said he’s seeing some companies agree to jobs that unquestionably are money-losers for them, just to keep some cash flowing, sometimes with disastrous results for all.

“[A homeowner] might get a bid of $1,000 from a guy who’s about to go bankrupt or a $3,000 bid from a guy who is competent and stable,” he said.

“I’ve been called in to finish jobs for people who took the $1,000 bid,” he said.

64%

The national average percentage of remodeling costs recouped upon selling a home. That means it costs 36 cents on the dollar to build just about anything for your home.

In the Chicago area, the best returns were not the glamour kitchen/bath projects, but smaller-scale and more utilitarian jobs.

115%

Return on sale for replacing an entry door with a midrange substitute

85.8%

Return on upscale fiber-cement siding replacement

67%

The average payback on a midrange major kitchen remodel

50%

What you’d recoup on the average upscale bathroom remodel

By Mary Umberger

Chicago Tribune

The popular image of wind power is of a windmill-like tower cranking away on the prairie.

The wind power at Kathleen O’Donnell’s North Side home, however, comes from a rooftop device that vaguely resembles a barber pole, without the red-and-white stripes.

O’Donnell has installed an 8-foot-tall wind turbine at her Ravenswood Gardens home, where since October it has harnessed the breezes to provide some of the electricity for the former two-flat that she and her husband spent about a year converting into a single-family home.

The premise is fairly simple: The device’s helical-blade scoops catch the wind, forcing it through the turbine and to the home’s generator, creating electricity. If the wind isn’t blowing, the home is powered by the energy grid, as usual.

An architect, O’Donnell realizes she’s something of a pioneer when it comes to wind turbines in residential use.

“It’s a little bit new,” she said. “Wind is not as ubiquitous as solar, in terms of what people are willing to do.”

But maybe not for long. She notes a broader willingness to embrace energy-conserving products these days. Such acceptance has come a surprisingly long way in a just a few years, she said, and solar panels, geothermal heating and even green roofs don’t get as many quizzical looks as they used to.

Usually, it’s all about that other green, she said — cost.

“The ‘want’ is out there, but the ‘will’ is lagging,” O’Donnell said. “Everybody wants it (when clients) call, but when they’re told this is this much money, and it will increase their overall costs, then reality begins setting in, and they start cutting it.”

Wind power is pretty much an unknown, as far as public acceptance, she said.

“Some people might look at wind and say it’s a vanity thing,” she said. “It’s untested. We just don’t know about its (economic efficiencies). The payback is probably going to be better than solar. Maybe in a year or six months we’ll be able to extrapolate that” at her house.

So she’s using her own home as a guinea pig, to an extent.

“I’m committed to it and want to make my own personal investment to suit my own pursuits and for my goals for green building,” she said.

The costs are not insignificant. Her wind turbine (manufactured by Helix Wind Corp. in San Diego) lists for $7,500. In addition, there were costs for labor, installation, wiring, permits and fabrication of a steel structure and base to support it, which drove the total to roughly $16,500, she said.

The device is capable of fully powering her home, but because it’s so new (installed in October), she hasn’t been able to monitor its energy output precisely. In the spring, she said, she intends to incorporate solar panels to help power the house, in addition to green-roof technology to help heat and cool the house.

O’Donnell may eventually move Tripartite Inc., her architecture practice, into her home, which will complicate her energy use, she said. On the other hand, it could make such conservation measures more valuable.

“I’m skeptical that the turbine is going to (cover) our total energy use, but at least it will be a large portion,” she said. “If we have an office in here and we have a lot of computers going, it will use a lot more energy.”

Nonetheless, she said, the days are gone when a homeowner can do a major renovation and not think long and hard about energy-conservation features.

“We’ve turned a corner,” she said. “You can’t do a rehab and not put in the insulation and the (efficient) windows.

“With all these houses on the market, and (a homebuyer) has to make a choice between house A and house B, and house A has a green aspect and house B missed the mark, I don’t know how you’re going to sell house B.”

Hear Mary Umberger at 12:49 and 11:15 p.m. Tuesday and Thursday and at 10:30 a.m. Saturday and Sunday on WGN-AM 720. Write to her at Money & Real Estate, Chicago Tribune, 435 N. Michigan Ave., 4th Floor, Chicago, IL 60611 or send e-mail to housingnews@comcast.net.

Mary Umberger Chicago Tribune