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"The Sign of Renovation in Your Neighborhood

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Home Renovations Pay Off at Sales Time

About Remodeling

Rebecca McCarthy June 2005

AJC 2005 HOME SALES REPORT  <!--[if !

Home renovations pay off at sales time

By REBECCA MCCARTHY

The Atlanta Journal-Constitution

In metro Atlanta, turning a dowdy kitchen into a tap-dancing showstopper will pay off big when the home is sold — more so here than in other areas of the country. So could remodeling a bathroom or building a deluxe master bedroom.

Homeowners in the Atlanta area recoup an average of 10 percent to 22 percent more on their upscale home renovation projects than do people nationally, according to a cost vs. value survey conducted by Realtor magazine.

Here, the cost of an extensive high-end kitchen remodeling averages $73,425, but yields a 102 percent return when the house is sold. Elsewhere, a home seller would recoup an average of 80 percent of the cost of a major kitchen remodeling, the magazine's survey shows.

The reasons for such a high return vary, say those who work in the home improvement and real estate industries. In part, the statistics reflect a popular, competitive real estate market. But lifestyle choices also drive the trend. Seems metro Atlantans are looking to luxurious home surroundings as a tonic to long commutes and stressful schedules.

Metro Atlanta is one of the largest housing markets in the country, and it's a much sought-after destination. People who transfer here for jobs often never leave. With a strong market in both new homes and re-sales, houses are appreciating and homeowners are apt to recoup their investments more quickly than in a market where houses are not appreciating as much, Realtors say.

And there's no question that what sells houses in metro Atlanta are "baths and kitchens," says Realtor Wes Vawter, whose Vawter Group is part of Jenny Pruitt & Associates. He sells primarily in Buckhead, Brookhaven and Vinings.

"When you go into a white kitchen, people think they'll have to gut it," he says. "Nowadays, most of the newer homes or renovated homes have the kitchen as part of the living space. It's no longer a remote room. The house with the renovated kitchen is selling, maybe because people don't want to go through the agony of a renovation. It's worth it to them to have it done."

'Taste is maturing'

Harry Norman Realtor Betty Jones, who sells in the northern suburbs, reports a similar client reaction to a 1980s-era kitchen. She was showing a house that listed for $1.1 million, and the prospective buyers liked everything — but they recoiled from the white cabinets and Corian countertops.

"They couldn't afford to buy the house and redo the kitchen," Jones said.

Jerome Quinn, CEO and president of SawHorse, an Atlanta-based renovations company, said home sales are definitely a force in the Atlanta renovation market. But he says many of his projects are also keyed to "lifestyle" decisions.

"While our clients keep an eye toward investment, they're investing in improving their quality of life," Quinn said. "It doesn't come out just to the dollars."

Since SawHorse began 25 years ago, Quinn said, the Atlanta population has become more sophisticated and discerning.

Designer Roy Otwell, co-owner of Poliform Atlanta, concurred, saying more people are relying on professional designers. Otwell sells contemporary Italian cabinets, bookcases, closets, kitchens and bathrooms. About half the customers come into his store with an architect or interior designer in tow, he said.

"I think Atlanta is becoming a more discriminating marketplace," he said. "Taste is maturing, and people are able to recognize and appreciate better design."

An Atlanta obsession?

Anne Sweaney of the University of Georgia's housing and consumer economics department has spotted the design-for-better-living trend, too. She said she believes people in metro Atlanta are working so much and so hard, that when they're home, they want to retreat to refuges such as the kitchen or bath.

Nationally, the renovation trend is booming, with more than 1 million homes undergoing major projects annually, according to the National Association of the Remodeling Industry.

Residential improvements were valued at $123 billion across the country in 2003-2004, says the Raleigh-based FMI Corp., a management consultant firm to the construction industry. In Georgia, residential improvements for 2005 are expected to reach $3.74 billion, a 7 percent increase from 2004.

Pat Brown, a resident of Gwinnett's Sugarloaf Country Club subdivision, woke up one day and realized she "could no longer stand" her white kitchen. A retired nurse, she said the colors reminded her too much of a hospital. Working with designer Christi Tullis of Ambiance Interiors in Suwanee, Brown tranformed her kitchen with high-end applicances, maple cabinets, new counters and floors and paint.

Atlanta interior designer Pamela Powell, who specializes in high-end renovations, believes "people in Atlanta are obsessed with nice kitchens and bathrooms — and are willing to pay for them."

Powell said a trip to Minneapolis illustrated a regional bias toward upscale kitchens and bathrooms. She and others visited the Walker Art Center there and some elegant homes of art collectors, people who could easily drop $20,000 for a piece of contemporary art. The houses were lovely, but two rooms delivered less than the visitors expected.

"Everyone from Atlanta was surprised at the modest kitchens and bathrooms," Powell said with a laugh. "We're just more obsessed."

Sometimes, Powell believes, the modern, commercial-grade kitchens found in new, large suburban homes are driving renovations in older houses. In-town homeowners appreciate the conveniences and technology found in these new houses, but they don't want to move. Instead, they bring their older house up to the standards of newer ones.

New hubs for living

In Atlanta, an extensive kitchen transformation usually requires about $20,000 for appliances, $30,000 to $50,000 — or more — for cabinets and thousands for labor and design, according to industry professionals. For that amount of money, a homeowner gets, at the very least, a hardwood floor, granite or stone countertops, semi-custom or custom wood cabinets, a commercial-grade cooktop and hood or a commercial-grade range, two convection ovens and two sinks. Plus, they get a paneled dishwasher and a Subzero refrigerator, or some equivalent, often masquerading as an armoire. And usually a work island is part of the plan.

The kitchen also has become the hub for gadgets such as computers, televisions, ports for recharging cellphones and personal data assistants. It's a place where family members organize their things, coming and going, and where people store their stuff, said interior designer Lee Woodall, a certified master kitchen and bath designer and president of the Georgia/West Tennessee Chapter of the National Kitchen and Bath Association.

"It's such an important gathering place, homeowners want it to look as good as the rest of the house," Woodall said. "They want it to reflect the same quality and the same design touches."

Norcross residents Pat and Patti Henry, whose house sits on 3 acres on the Chattahoochee River, wanted their dumpy 12-year-old kitchen to do just that. They hired interior designer Jennifer Cook and planned a complete renovation, which cost $100,000.

When the project ends, they'll "have a kitchen that better reflects their lifestyle," said Cook, "and the appraised value of their house."

Certified kitchen designer Jere Bowden says that unlike other rooms in the house, "we ask our kitchens to look good now and 25 years from now."

Bowden believes today's wood cabinets and commercial-grade appliances are bound to have a longer life than what she calls "the leisure suit" of the 1970s: pickled cabinets and avocado green appliances. Her affluent clients often spend two or three years considering how they want their kitchens to look and function before undertaking a renovation.

"These are people who entertain at home," Bowden said. "They upgrade their kitchen to improve their quality of life. If it's a classic design, someone else is going to recognize and pay for it when the house is sold."

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