A hot-market conundrum: find a new home or build an addition?
Amid bidding wars, trying to buy can break your heart. But there’s another way to get more space.
Most couples imagine starting their new life together in a dream home — not sleeping on a mattress on the kitchen floor on their wedding night and waking the next morning to the sound of hammers and saws. But that’s how April Dovholuk and Michael Ermann spent the first night — and the first few months — of their marriage. The work on their Somerville house was so extensive that the couple and their cats spent weeks confined to the kitchen and bathroom. “Mike jokes that if we can make it through this we can probably make it through a lifetime of marriage,” Dovholuk says.
Dovholuk, senior director of clinical operations for a pharmaceutical company, was single when she bought the two-bedroom, one-bath house in July 2013 for $483,000. She spent another $100,000 opening up the downstairs living space and figured that would be the end of it. “But Mike and I hadn’t met at that point, hadn’t talked about a family,” she says. “I thought step one of the renovation was the final step, but it wasn’t.”
Dovholuk and Ermann, a program analyst at National Grid, first crossed paths at a Museum of Fine Arts gala. By the time they married, on July Fourth last year, they were already a couple of months into the second renovation, which added two bedrooms, two bathrooms, and an office. That project nearly doubled their living space, giving them a third-floor master suite and bedroom-sized office, since they both work from home a few days a week. The house now sleeps 12 when extended family visits.
Though the most recent project set them back about $360,000, in the boom-town economics of Somerville, undertaking it made sense. The couple’s total investment is now just under a million dollars, but a similar place down the street recently sold for $1.6 million — and it lacks some of the amenities and bespoke touches the pair has grown to love. “Even with the two renovations,” Dovholuk says, “the money we’ve put into the house is probably still at least $200,000 below comparable properties in the neighborhood. And a lot of the new houses have really generic work. I didn’t want a builder-grade kitchen.”
“What we did for Mike and April and how much it increased the value of their home is a complete no-brainer,” says David Supple, owner of New England Design and Construction in Boston, which did the work. “Talk to any realtor: One of the things that adds value to a home is more square footage.”
“It helps assuage some of the anxiety of spending so much to know this is our forever home,” adds Ermann. The couple cherish their 1,200-square-foot yard, adore that it abuts the bike path, and especially appreciate that so many of their neighbors are couples with young children — or, like them, expecting a new addition to the family “any day now.”
With Greater Boston housing prices higher than they’ve ever been and inventory persistently low, Dovholuk and Ermann are far from alone in deciding to opt out of the soaring prices, fierce bidding wars, and inevitable disappointments of today’s real estate market. Faced with the age-old decision to love it or list it, more and more people are choosing the former — and adding square footage so they’ll have more of their homes to love.
What Harvard’s Joint Center for Housing Studies calls “discretionary projects” — extensive remodels and additions that aren’t strictly necessary but improve quality of life — have been on the upswing, with total homeowner improvement costs nationwide reaching $192 billion, their highest point since before the recession. Thirty percent of that figure has gone toward additions, finishing basement or attic space, and other “major structural alterations.” Of the 50 metro areas examined in the center’s latest Emerging Trends report, published in 2015, Boston had the highest share of large projects, with half of them costing $50,000 or more.
Many homeowners assume that if you’re going to put $200,000 into an addition, it must make more sense to move, says Bill Farnsworth, owner of Custom Contracting in Arlington. “But then when you start looking, and everything you want is $300,000 more than your house is worth,” Farnsworth says, “you realize it makes more sense to stay. Why go out into the crazy real estate market when you can have the builder come to you?” That’s the way many homewners see it, too. “In January, seven out of our first ten calls were for additions,” he says.
For Farnsworth clients Marisa Silveri and her partner Amy Moylan — both of whom work full time in addition to parenting two active youngsters, ages 2 and 4 — cost is not the only reason to stay put. Most of all, they love Arlington, and it’s “exhausting even to think about selling our place and buying another one,” says Silveri, a neuroscientist at McLean Hospital and Harvard Medical School. She and Moylan moved from a Central Square condo into an Arlington single-family in 2007. “We’d have to do significant work to our house to get the money we could for it, and who has time or energy to put into that, let alone find a house, put an offer on it, buy the house, pack up and move?” The couple added a sunroom in 2012 and are just embarking on a kitchen bump-out — which together will run them about $160,000 but will up their home’s value by almost $250,000.
Thomas Swyst, an Arlington-based product designer, echoes Silveri and Moylan. “The idea of staying in town but buying a bigger house seemed tumultuous,” Swyst says. So he and his wife, Tracy, director of design operations at Bose in Framingham, sprang for a two-story, 750-square-foot addition last year, even though it was “not a smart move” financially.
“On a spreadsheet, it was illogical,” says Swyst, noting that the couple spent about $300,000 on a house that had cost them $465,000 in 2006. “But the bottom line is we just love being in this town and like our neighborhood. The notion of increasing resale value wasn’t part of it for us. Where we are is as good as it gets.”
Homeowners are coming to the same conclusion. The addition craze is so pervasive in suburbs like Belmont, Needham, and Lexington that those towns and others are considering adjusting zoning and building codes to rein it in.
Arlington, too, is looking at current laws. So many lawns there have sprouted building-company signs that you’d think the contractors were running for president. “Up for discussion are setbacks, heights, what constitutes a real basement,” says Fernando Carreiro, owner of Villandry Contracting in Arlington. But for now, zoning regulations in Arlington make additions easy as long as they’re on the existing foundation. And the town has lots of ranches just begging for second stories. Carreiro’s 12-person company was so busy last year, he put a freeze on new estimates. “We’re booked a year-and-a-half out,” he says. “That’s never happened before, and we’ve been in business in this town since 1985.”
Among the clients Villandry picked up recently was the McKinnon family. Matt, an IT professional, and Carrie, a director of finance at a shoe company, had their son, Holden, five years ago and planned to have one more child. “Turned out the second one was twins,” says Matt, “so we knew it was going to get a little cramped.” Their girls are now 3½ and sharing a room with their big brother in the couple’s two-bedroom Arlington home.
After two years of planning — all the while checking out open houses in their vicinity — the McKinnons are starting work this month that will double their square footage and mean six to nine months of sleeping in the living room and basement. “We know it’s going to be very disruptive,” Matt says, “but we’re trying to look at the light at the end of the tunnel. We have pictures of the final product on the fridge that we can look at when things get stressful.”
Though doing dishes in the bathtub and putting half of your stuff in storage is a hassle, the final product can be worth a few months of inconvenience. Chris Chu, an architect in West Newton (who writes occasionally for the Globe), not only hears this from her clients but also knows it from her own experience. “I have clients who look around and decide to stay where they are and change it instead,” she says, “because you can create the home you want versus just happening to find the home that’s perfect for you, which is rare.”
Chu says she’s seen a “huge spike” in the number of families doing additions in the past two years — especially in western suburbs like Needham, Newton, and Wellesley — knowing they’ll get a custom house in the location they love that will increase in value when they do eventually decide to sell.
She and her husband, Barry Abramson, a real estate development consultant, added a garage and 600 square feet to their home five years ago. The now L-shaped house not only maximizes its space and light but also creates a cozy outdoor living room that the family uses all summer. “It feels like a completely different house,” Chu says. And they didn’t even have to brave the real estate market to get it.