Researchers at Harvard University recently completed a major study and have concluded that, "After languishing near the bottom for several years, the remodeling market finally appears to be pulling out of its prolonged downturn, and renewal of the nation's housing stock is getting underway."
"The U.S. Housing Stock: Ready for Renewal" is the latest report in the Improving America's Housing series published by Harvard's Remodeling Futures Program at the Joint Center for Housing Studies. Overall, the researchers found that previously foreclosed properties are being rehabilitated; sustainable home improvements are gaining in popularity; older homeowners are retrofitting their homes to accommodate their future needs; and the future market potential is immense, as the emerging "echo boom" generation is projected to be the largest in U.S. history.
Regionally, homeowner spending on remodeling was 20 percent higher in the Northeast and 10 percent lower in the South compared with the national average in 2011, the report says. And since the 1990s Sunbelt metro areas have generally seen stronger growth in home improvement spending. As of 2011, metro areas with the highest per-owner improvement spending included the rapidly growing Sunbelt metros of Las Vegas, Phoenix and Austin, Texas, as well as traditionally stronger markets such as Boston, New York, San Francisco, and Washington, D.C.
Also, formerly distressed properties coming back onto the market is contributing to an increase in remodeling spending. "After limited spending during the housing bust, renovating the more than one million distressed properties that were sold in 2011 contributed nearly $10 billion to home improvement spending," said Eric Belsky, managing director of the Joint Center. "With about three million more foreclosures and short sales in the pipeline, there is even more such spending ahead of us."
"As baby boomers move into retirement, they are increasing demand for aging-in-place retrofits," said Kermit Baker, director of the Remodeling Futures Program. "A decade ago, homeowners over 55 accounted for less than one third of all home improvement spending. By 2011, this share had already grown to over 45 percent. And generations behind the baby boomers will help fuel future spending growth since echo boomers are projected to outnumber baby boomers by more than twelve million as they begin to enter their peak remodeling years over the next decade."
