Carrying jobs, additions, and consumer confidence
After a few years of slow and spotty recovery for the remodeling industry, Airoom, Chicagoland’s leading design-build remodeling firm, has been at the forefront of the area’s growth.
“We’ve definitely seen an increase in remodeling projects so far,” said Michael Klein, CEO of Airoom. “A lot of projects and plans were on hold for many homeowners,” Mr. Klein noted, “but now they’re optimistic again and are looking to increase the value of their existing homes as the price of new homes has recently outpaced the pace of inflation.”
“With prices up 20% across the board,” continues Klein, “20% more on a remodel budget is much more affordable than 20% more on the cost of a new home.”
Airoom, an industry leader since 1958, has already seen projects increase by 15% over last year, along with budgets. The recent growth can be attributed to a rebounding economy, and interest-rates at near-record lows.
Financing Their Future
“The market, as always, is still a little volatile,” says Tony Simatos, President of Lamb Financial, a sister company of Airoom. “But with interest rates below 4%, many homeowners are trying to get the financing now to start their projects before rates creep back up.”
While capital isn’t necessarily easier to obtain from banks than it was a year ago, Lamb Financial sets itself apart in the finance industry by offering a wider range of financing options than are available from banks and mortgage brokers.
“Oftentimes homeowners prefer to put their cash to work in the stock market where they can earn greater returns above the near historical borrowing rates currently available. Traditional mortgages and remodeling loans don’t always cover the entire project, so whereas traditional banks would tell the homeowner to fund the rest on their own, we offer financing that will cover everything.”
Lamb works along side the design and build teams at Airoom to project long-term value for homeowners and find opportunities to make their return on investment possible.
“The beauty of having financing in house,” notes Klein, “is that the homeowner isn’t left on their own to manage the loan and payouts. Our crews communicate with Tony and his team what the needs are, and they help the homeowners with cash flow and draws. It’s support that makes our projects run more smoothly than when homeowners go at it alone.”
“Instead of their banker saying, ‘here’s your loan, good luck with your remodel,’ we ensure that the homeowner always knows their options and their cash flow, and we re-optimize financing as needed while the project continues,” says Mr. Simatos.
The Age in Place Trend on the Rise
With many options for financing available through Lamb Financial, homeowners are able to plan for their projects, and their future as well. With consumer confidence up 2.5 points so far this year, homeowners are preparing not only for the next 10 years in their homes, but their resale value down the line.
To be clear, not all homeowners are starting projects with increased resale values in mind. A recent trend that Airoom has been seeing is the growing number of baby boomers who are planning projects to enable them to age in place.
Sandy Pifer of Arlington Heights has just begun a project to turn her post-war ranch into the perfect home in which to enjoy the rest of her retirement. Although the project was almost sidetracked by a previous construction firm, Sandy turned to Airoom to redesign and finally build her dream home.
With plans for a new master suite, ADA accessible bathrooms, a room designed for a live-in caretaker, and a wood working room in which to enjoy her longtime hobby, Sandy is getting ready to move out of her two-story condo and into her new, custom home.
“I’ve been extremely pleased with everyone I’ve met at Airoom,” says Sandy. “They’ve been attentive, courteous, and great listeners.”
The Design Build Advantage
Sandy’s project was almost derailed when the construction company that was referred by her first architect added nearly $100,000 to their initial budget.
“A lot of homeowners get designs and a rough price range from an architect and then try to find a builder to meet the criteria,” noted Mr. Klein. “The problem is that a lot of the time, when the two aspects of a project are separated, there is a hand-off. The architect finishes the plans and the builder wants the job and says yes to whatever it takes to win the job and then the homeowner is lost in the middle.”
“That’s why Airoom’s approach is different, and has led to our 95% customer satisfaction,” notes Klein. “Since we cover all aspects of a project, nothing gets lost in translation. When a homeowner loves our design, we want to make sure we’re both realistic about making it happen. That’s what makes happy clients and great homes.”
Although details can change throughout the design phase, Airoom’s patented S.T.A.R.T. process ensures that every detail is properly account for so that the final price is known and understood prior to the client making their final decision.
Walt Bruckner Jr., the Project Development Manager for Sandy Pifer’s ranch remodel, was able to run through everything that Sandy wanted and give her a budget that was both reasonable for her budget and possible for the work required. “Using the S.T.A.R.T. process, we initially quoted the project at about $320,000. But, after she finished all the final selections, it ended up closing in at a little over $309,000.”
With the recent increase in remodels and additions, the Chicago area construction industry is not only bringing on more work, but more employees.
Construction unemployment had reached as high as 27% during the recession. That number is now down to an estimated 9%.
“The demand for workers has gone up drastically,” says Mr. Klein. “A lot of workers had moved into other industries during the recession. The limited workforce has led to higher prices for new homes. That’s pushed more homeowners into the remodeling market, where the worker gap is still the same, but the amount of capital needed is more attainable.”
Airoom is currently looking to hire another four employees this quarter, having just recently hired another three full-time employees in April alone. That number is expected to increase as the year goes on.
“My father, Burt Klein, who founded Airoom almost 60 years ago, always taught me that employees are the most important asset to any business,” says Mr. Klein. “With a good team, you can do good work. And that work translates into happy clients, which then leads to great referrals.
“Having the need to add new people to our team is a privilege, it’s proof of our work and of our name.”