Wait line grows for renovations
By Greg Wiles
Advertiser Staff Writer
By Greg Wiles
At Pacific AquaScapes Inc., a builder of high-end swimming pools, new customers can expect to wait until the end of next year or early 2008 before the contractor can get to their projects.
"We don't want to turn people away forever, but if they need a pool now, they're going to have to go somewhere else," said Don Morrison, chief financial officer for the company based at Campbell Industrial Park. The contractor is working on several large projects as well as pools for luxury residences.
"We have a lot of work right now."
Pacific AquaScapes isn't alone in that regard. Hawai'i contractors are enjoying a home renovation, remodeling and improvement boom now in its fourth year. While there are predictions the business will slow, homeowners still must wait in line if they want contractors to replace a kitchen, update a bathroom or add more rooms to their homes.
"Remodeling is astronomically, outrageously, busy," said Lalie Mersburgh, office manager at Trim Line Contracting Inc., an 'Aiea-based contractor. The wait is two weeks to get an estimate, and in bigger projects, months before the work can begin, Lalie said.
The tight contractor situation has some people shaking their head when they need work done right away. Howard Garma, general manager of Pearl City-based Williams & Associates, said he gets calls from people who've had trouble getting telephone calls returned at other contractors.
"It's something that people sit around the dinner table and talk about," said Paul Brewbaker, Bank of Hawaii's chief economist.
State figures for additions and alterations building permits show the home-improvement binge started in 2003, when the permit value jumped to $225.8 million from $158.5 million a year earlier.
Last year the residential total was $408.4 million, or more than three times what it was three years earlier. Cable television shows such as "Curb Appeal" and "Flip This House" have kindled some of the mania, though contractors cite low interest rates, plentiful home-equity loans and a healthy housing market as helping fuel the trend.
A survey by Scarborough Research, a national consumer research company, found roughly four in 10 Hawai'i households did some kind of home improvement in the past year. City and County of Honolulu data shows 9,322 building permits for alterations, additions and repairs to dwellings were issued in the 12 months ending June 30. That compares with 7,876 in the similar period a year earlier.
Makaha homeowner Rick Mendez found out about the contractor crunch when he went to get quotes for a 15-foot-by-30-foot swimming pool earlier this summer. It was difficult getting someone out to the Leeward Coast to do the estimate. When he found a contractor, he was told work wouldn't start for another three months.
"It's just mind-boggling," Mendez said, noting his dreams of having a pool in by the end of summer evaporated. Now his goal is to be swimming in his backyard next summer.
At Trim Line, the work has been steady for a few years, though people's reasons for improvements have varied. People wanting to "flip" homes, i.e. buying, making improvements and selling at a profit quickly, aren't as numerous these days, Mersburgh said.
There are still lots of people who want to update kitchens and bathrooms because they either just moved in or are wanting to prepare a home for sale. The jump in housing prices — O'ahu's median home price was $640,000 in the second quarter — also has implications for the market because families are adding rooms and even entire floors so that relatives, who can't afford to buy, can move in, Mersburgh said.
"We're backed up until probably the end of November," said Clarence Bueno, owner of Kailua-based Fun Pools Hawaii. "I think a lot of people are saying I'm going to stay here, so I'm going to put my money into this house."
At Pacific AquaScapes, one of three unionized swimming pool contractors in the state, some of the backlog is a result of a dearth of workers. The company installs pricey swimming pools, koi ponds, streams and waterfalls typically at commercial projects and multi-million-dollar homes.
"Roofing, tile companies, everybody is short on labor," Morrison said. "There's just not a lot of talent available right now."
Morrison and Bueno said they thought the swimming pool market may slow as interest rates rise and home sales decline.
"I think this is going to be the last year," said Bueno.
A University of Hawai'i Economic Research Organization report authored by Brewbaker, the organization's executive director, Carl Bonham and Associated Professor of Economics Byron Ganges forecasts a soft landing for the construction industry as growth gradually decelerates over the next several years.
"It may slow down a little bit, but not much," said Williams & Associates' Garma.
The UHERO report projects softer home demand and price appreciation will lead to a slowing in residential building. Construction jobs are forecast to rise 7.1 percent this year, but slow to 2 percent growth next year.
A rise in construction prices also will factor into the slowing, the report said. Garma said he hears about other contractors not returning telephone calls, but tries to respond to each one because people will probably remember the courtesy in the future, when the construction cycle eventually dips.
Pacific AquaScapes' Morrison said swimming pools will remain a popular feature in home upgrades in the future, but he recognizes the industry has its ups and downs.
"I think it's pretty well at a peak or close to a peak right now," said Morrison. "Nothing is forever, and this is not forever."
Reach Greg Wiles at email@example.com.