Posted on: Sunday, October 12, 2003

Boomers throwing money into homes

By Anne D'Innocenzio
Associated Press

NEW YORK — As baby boomers get older, many are increasing their investments in their biggest assets, their homes.

Ilene Hurwitz Schwartz just spent $50,000 on kitchen renovations, complete with granite countertops and stainless steel appliances, for her Pittsburgh home.

Meanwhile, Ann Ellis spent $75,000 breaking down the living room, dining room and kitchen walls to create a great room. The Papillion, Neb., resident plans to spend $30,000 more, first remodeling the basement and then creating a master bedroom suite.

"We wanted an upscale looking kitchen. There is something about a kitchen that is a nurturing place," said Schwartz, 48, the mother of a 10-year-old boy.

"We are creating spaces that are working with the lifestyle we like," said Ellis, 38, mother of two boys, ages 10 and 7.

Many boomers, who are in their peak earning years, are spending more on their homes these days because they expect to keep on making big salaries as they delay retirement. And with the stock market less of a certainty than in the past, putting money into real estate, including kitchens and master bedrooms, seems like a safer bet to many homeowners.

And with upscale boomers like Schwartz and Ellis accounting for a bigger chunk of the surging home improvement business, retailers are increasingly trying to cater to their luxury tastes.

Domain Home Fashions, purchased last year by Aga Foodservice PC of Britain, is rolling out stores that feature Domain furniture and Aga's upscale appliance styles that coordinate well in a great room.

Home Depot Inc., the nation's largest home improvement chain, is renovating its kitchen and bathroom showrooms to showcase more upscale features. The showrooms play up natural stone counters like granite instead of acrylic materials. Nickel has replaced yellow metal for faucets.

Viking Range Corp. launched Viking Culinary Art Centers in certain locations across the country to give consumers hands-on experience with its commercial stoves, and has seen an increase in sales in markets where the centers are operated. Viking stoves range from $2,750 to $9,000.

"(Boomers) are looking for long-term quality," said Mark Brick, president of The National Association of the Remodeling Industry, noting the improvements are going beyond "bells and whistles."

According to the most recent study published by the Joint Center for Housing Studies at Harvard University, an estimated $214 billion was spent on home improvement in 2001, up from $180 billion in 1999. The report said big-spending home owners are responsible for an increasing share of the market. Households spending $20,000 or more accounted for 48.3 percent of the home improvement market in 2001, compared with 33.3 percent in 1995.

Households spending $35,000 or more made up 33.9 percent of the market in 2001, compared with 19.5 percent in 1995.

Kitchen remodeling continues to dominate sales, but master bedroom suites are also becoming more popular, industry executives said.

Ellis wanted a 10-foot-by-4-foot island, cherry cabinets and brushed nickel faucets in the kitchen, as well as an adjoining sitting area with sofas and two chairs. As for creating a master bedroom suite, she envisions opening up a small bedroom and creating another walk-in closet.

Brick, also the president of the B&E General Contractors Inc. in Milwaukee, estimated that kitchens his company builds cost anywhere from $25,000 to $100,000, with a growing number of customers at the upper end of the scale. He estimated that it costs about $30,000 to $50,000 to renovate master bedrooms, and three times as much to expand a bedroom into a suite.

But Home Depot recognizes that not everyone wants to spend money on upscale improvements or appliances. That's why it is also offering lower-priced alternatives.

For example, Home Depot is featuring counters made of Silestone — primarily made of quartz — that resemble granite but are more resilient, and refrigerators that look like stainless steel but that are covered in laminate. The cost for installing granite counters ranges from $62 per square foot to $94, while Silestone is priced a bit lower — $57 to $84 per square foot, Home Depot said.