Interesting that you mentioned this issue.
We are remodeling our kitchen with an additon. We have been in our home for 41 years and want to stay here. We have looked at all out options, condo, new home, senior living community and have decided against them all. Our Mortgage is way paid off and our home was $38,000 in 69. We love our room and privacy. Surpisingly, living in a high priced area with high expendible income does not follow the economic downturn as in other areas of the country. The renovations are quite expensive. Our bids are high for those contractors that have monied clients and are very busy (and they are). Other builders who have the ability to do the job did not seem busy and we were afraid to take the chance. The bottom line is that building renovations including two story additions are doing fine in the DC Metro area. There are many large homes that need large projects and dollars to pay for it. We chose a builder that has a small company, a little way out of the City area, but one that is very busy.
Hope this helps.