Portlanders like the Marcheks find payoffs in their own houses
Gretta and Eric Marchek had a dilemma: They loved their southwest Portland neighborhood, but needed more space.
So they joined a growing number of homeowners who remodeled rather than move. In their case, the extensive remodeling project more than doubled the size of their Multnomah Village house, gaining them two bedrooms, two baths, more parking and a second-story view.
“It was a really great situation,” said Eric Marchek, a physical therapist who commutes by bicycle to his office downtown. “It was an easy decision once we were able to work it out financially.”
In Portland, the values of remodels are approaching their prerecession highs, according to Josh Lehner of the Oregon Office of Economic Analysis. He said the value of home improvements have outpaced new construction values through much of the economic rebound.
Nationally, remodeling activity has grown for 10 consecutive quarters, according toMetrostudy’s third-quarter Residential Remodeling Index, released last week.
While first-time homeowners aren’t contributing yet to the housing rebound, “remodeling activity is being buoyed by growing families and baby boomers, the demographics with deeper pockets,” said Brad Hunter, chief economist of Metrostudy.
That description suits the Marcheks to a T.
Gretta Marchek, who is expecting a baby in January, likes having a larger house in Multnomah Village partly because it accommodates her three jobs – one at Portland International Airport, one in Tualatin, and her home-based business making custom dancewear. Before the remodel, she created her dance outfits in the basement, which got “a little chilly.”
Eric Marchek said the plan came together when he realized the couple could secure a rehabilitation loan that could pay up to 90 percent of the project cost. Now they live in a remodeled house with a lower mortgage than they could have gotten with new construction in the same neighborhood.
All told, Eric Marchek think the remodel, carried out by Portland’s Hamish Murray Construction, a company owned by Gretta’s brother and sister-in-law, cost about $200,000. Marchek said he and Gretta owed about $200,000 on the original house and ended up living in one with an appraised value around $425,000.
Comparable houses nearby have sold between $600,000 and $700,000 according to Trulia.com.
Every situation is different and prices are highly variable, but homebuilders suggest the average cost of building a new house is about $125 per square foot. Remodeling costs can be lower or much higher, but the Marcheks saved some money by doing much of the demolition themselves.
“We really love the area we’re in,” Eric Marchek said. The remodeling project, while expensive, “saved a little money” compared to the cost of buying or building a new house, he said.