As housing market cools, remodeling heats up

It's an interesting predicament.

The Wall Street Journal says a national reduction in housing starts means contractors are making themselves available for remodeling projects.

The Journal says that same reduction in housing starts means the demand for lumber isn't as high, which suggests remodeling materials costs should ameliorate.

Locally, remodelers say the biggest difference they're seeing is a greater availability of subcontractors and trades people.

"Because new home construction is down, a lot of the subcontractors that we work with, the mechanical, the trade subcontractors don't have as much on their plates so they're more readily available for us, and they're also willing to come in at a little less price than they normally would," said certified remodeler Mark Bonzel of Heritage Builders in Saint Louis Park.

His counterpart at Awad and Koontz agrees. But Ali Awad says the abundance of contractors may get the job done faster, but it hasn't had a big impact on remodel job bids yet, nor have moderating prices for dimension lumber and sheet goods like plywood.

"It's too early to tell whether prices are going down, but they have flattened out, and that's nice because prices have been increasing from year to year pretty significantly," said Awad.

The Minneapolis architect says the biggest influence on remodel jobs right now is the same as that which drives new home starts and existing home sales... interest rates. Higher rates mean less business... but, "When they go down a quarter of a point or so, as they have the last time interest rates changed, more people are willing to jump on board," said Awad.

For the time being though, remodeling companies are tickled at the possibility of more business coming their way.

By Ken Speake, KARE 11 News

Home sales still slow in September

Minneapolis/St. Paul Business Journal - 2:22 PM CDT Wednesday
by Katharine Grayson
Staff Writer

The number of homes sold in the Twin Cities continued to drop in September, even as the number of units put on the market fell by 12 percent compared to last month.

An abundance of properties up for sale at relatively flat prices have made for a buyers' market in recent months. But, in September, the number of housing units added dropped by 5.08 percent compared to the same period last year--and by 12 percent compared to August.

This could be a sign that the market is stabilizing slightly, according to the St. Paul Association of Realtors.

"There are some indicators telling us we could be approaching the bottom of the current cycle," said June Wiener, president of the association, in a statement.

"There has been some downward pressure on price, but not as significant as other markets across the country," she added. " Buyers are practicing restraint in some circumstances, but overall sales indicated that sellers and buyers are still finding common ground across the metro."

The number of units sold in the Twin Cities area continued to decline in September, with 23.7 percent fewer units sold for the month than during the same period last year. Pending sales were also down by 24.4 percent compared to September of 2005.

Sale prices, meanwhile, held steady.

Hungry for options

Even as trendy restaurants start to expand outside the city, suburbanites say they don't have enough choices.

David Peterson, Star Tribune
Kris Pierskalla has spent most of her 36 years in west Bloomington, and it has always been an issue: Why are there so few places to eat?

"We have to drive to Eden Prairie to get any decent family dining," she said, which means a total of 30 minutes in the car. "My mom's 3 miles away, and we always talk about that."

Laurie Erickson drives a lot farther than that: nearly an hour each way from her home in Lino Lakes to the Cheesecake Factory in Edina.

The suburbs may have 80 percent of the metro's population and $92 billion in collective income. But even amid signs of change -- investors behind downtown landmark Bellanotte have opened a location in Blaine -- suburban residents continue to puzzle over the dearth of dining options when it comes to upscale or adventuresome places to eat out.

Lack of restaurant choices regularly tops lists of community surveys. In Lino Lakes, 75 percent called it the biggest single hole in their quality of life -- far ahead of anything else. This summer, a survey of Hudson, Wis., residents documented the same lament.

In Andover, the City Council recently blocked a crematorium from opening up in one part of the Anoka County city, in part because it was close to where officials hope to lure an upscale restaurant.

"I hear it everywhere I go," said Julie Trude of the Andover City Council.

"We have 30,000 people in this community. Why don't we have more places to eat out? There's one nice sit-down restaurant, a lot of pizza places, two McDonald's, and we don't have a lot else."

Slowing down, enjoying food

Studies show that there's truth to suburbanites' dining-out perceptions.

Although the suburbs have almost as many restaurants per person as there are in the city, the dominance of chains in the suburbs means that there are twice as many unique restaurants to choose from in Minneapolis as there are in the swath of Dakota County cities that stretches from Mendota Heights to Burnsville.

"Steaks and chops, chops and steaks!" said David Anderson, a lawyer from Eden Prairie. "Redstone and Wildfire have made it tolerable, but where are the trendy Asian or Indian restaurants? Do we have to travel to Lake Street [in Minneapolis] or St. Paul?"

The good news is that trendy restaurants Anderson and others crave are starting to expand out from the city. Just last week, the people behind downtown's Bellanotte announced plans for Crave, a sister restaurant in Edina, on the heels of another suburban venture in Blaine.

And Thursday night, Bob Kowalski, of the upscale grocery family, stood before a crowd at his new wine bar, Sage, in Mendota Heights, beside a fireplace and a wall of water streaming down granite facing, to announce something different for Dakota County.

"By design," he said with a smile, "there will be no TVs here, no football games, no Internet. This is about slowing down and enjoying good food, good wine and friendship. These are our great gifts. This is what people have been doing for centuries. We're losing touch with that."

But there are a good many obstacles to more restaurants in the suburbs.

In the same surveys in which they beg for dining choices, suburbanites also deplore the arrival of high-density townhomes, condos and apartments. But that's just the sort of development intensity restaurants need.

Another obstacle: the presence of families. The Fifth Congressional District, mainly Minneapolis, has the second-lowest rate of married-couple families as a percentage of all households, of any in the nation. The kids are in the suburbs.

"When you have kids it's hard to bring them into finer dining," said Mark Nazagian, who runs downtown Excelsior's Biella. "Those folks are looking for Friday's or Ruby Tuesday, where places like mine really need empty nesters, yuppies with no kids, young people with girlfriends or partners. Woodbury, Plymouth, Eagan -- it's hard to do stuff there. You get some people, especially weekends, but not on a consistent basis."

Another barrier is the lack of a weekday lunchtime crowd because there's a transfer of people out of most suburbs during the day. Andover, Cottage Grove, Apple Valley, Lakeville, Maple Grove, Brooklyn Park, Coon Rapids suffer a net loss of at least 10,000 workers each at morning rush hour.

"Everyone wants something like this," said Ann Peterson, co-owner of Canyon Grille, in Coon Rapids and Eden Prairie. "We've been approached by lots of suburbs. But they don't understand the financial demands, especially as an independent."

Sometimes suburbs that want more dining options have policies that deter new restaurants. Patti Soskin, owner of St. Louis Park's highly praised new Yum! Kitchen and Bakery, found she had to buy land across the street for more parking when she wanted to expand. A few minutes away in Minneapolis' Uptown, she sees places functioning just fine with fewer spaces than she has.

Luring restaurants

Suburban frustrations over dining choices are starting to ease with the push to create town centers or refurbish traditional downtowns with sidewalks, trees and village greens.

Those upgrades help lure restaurateurs. It helped Apple Valley nab Enjoy!, and St. Louis Park to attract the new Italian restaurant, Brix, praised by critics. And without a town center with the ambiance that now exists in Mendota Heights, says Ross Fefercorn, the project's developer, "no how, no way" would it now have Kowalski's Sage.

Restaurant owners, though, say suburbanites need to patronize the places they claim to want. "I can't wait for people to be burnt out on chains," said Jim Kyndberg, owner and chef at Bayport Cookery, an upscale restaurant near Stillwater. "It drives me crazy when Red Lobster has a two-hour wait and I have empty tables."

Still, he sees a gradual awakening.

"We are really training a lot of local culinary students," he said. "We play host to students from Cordon Bleu [in Mendota Heights] and for the strong majority of those kids, what's their goal? They want to open their own restaurant. My message to the suburbs is: 'Keep your voice alive, and restaurateurs will hear you. You will attract someone. That's what we like to hear.' "