A shift from remodeling to replacing and repairing

Fewer homeowners may be starting complete kitchen remodels, but they're still replacing countertops and refacing cabinets. They're also investing in better energy efficiency, according to a recent home-remodeling and repair report by ServiceMagic.com.

Others are splurging on hot tubs and home theaters, realizing that they may be in their homes for years to come.

"People are not going bigger and better, but improving what they have more cost-effectively," said Craig Smith, CEO of ServiceMagic, a Web site that connects homeowners with prescreened contractors. For instance, instead of buying new furniture, people are repairing what they have. Or deep-cleaning the carpet instead of replacing it.

After all, money is tight, lending standards are strict, and in a sluggish housing market you might not recoup as much of your remodeling investment at resale.

Home-improvement spending is expected to decline 12 percent in 2009, according to Harvard University's Joint Center for Housing Studies.

Lower financing costs may be starting to stabilize the downturn in existing-home sales, but "they have not been enough to offset rising unemployment and falling consumer confidence and encourage homeowners to undertake major home-improvement projects," Kermit Baker, director of the center's Remodeling Futures Program, said in a news release.

Before doing anything, people are carefully considering how they should spend their money.

"Now, it's harder to get money, in terms of credit, and homeowners are taking it a little slower and educating themselves a little more," said Bill Judson, an architect with HartmanBaldwin Design/Build in Claremont, Calif.

Meanwhile, those who do upgrade may be in for a bargain: Costs of materials, including lumber and copper, have dropped somewhat, Judson said. The biggest price cuts are related to labor costs as surviving contractors struggle to compete, he added.

The kitchen and bathroom are traditionally rooms where remodeling pays off. Some homeowners are still going through with full remodels these days, said Kimberly Sweet, editor of Kitchens.com. But they aren't the norm.

"A lot of people are making do with what they have, or maybe choosing to spruce up a few things and not do a full remodel," Sweet said.

Nationally, the volume of countertop-project requests rose 39 percent in the first quarter of 2009, compared with the first quarter of 2008, while major kitchen remodels are down 19 percent, according to ServiceMagic's most recent Home Remodeling and Repair Index/Survey. The data come from the company's service requests; the site received 4.2 million requests from homeowners in 2008.

Service requests for bathroom remodels were down 10 percent in the first quarter of this year, the report said.

Refacing or painting cabinets and updating cabinet hardware have always been an option to remodel on a budget. For cabinet replacement, there are improved options in thermofoil, Sweet said.

Consumers still gravitate toward granite countertops, but other less expensive, yet still attractive, materials are available, she said.

For those considering resale value, it might be best to go for minor fixes, Sweet said: "Doing all the high end may not get you the return you were looking for before. You don't want to be the most expensive house on the block in this market."

According to Remodeling magazine's 2008-2009 Cost vs. Value report, replacement projects that improve curb appeal - including siding, windows and decks-are some of the best bets for recouping money at resale.

Upgrading windows also can make a home more energy-efficient. ServiceMagic has seen more interest in projects including insulation and solar-panel installation, which cut energy bills and are likely eligible for government tax credits, according to the company's report.

And some homeowners are investing in energy audits, for a comprehensive view of what can be done to increase efficiency, Smith said. The cost: between $300 and $500.

"But people will pay that because the insight provided can save them a lot of money down the road," he said. And an audit can help homeowners prioritize projects.