Residential Remodeling Continues to Trend Upward
Spending on residential remodeling improvements will continue to grow at a gradual pace over the next two years according to experts. At an NAHB Remodelers press conference at the NAHB International Builders’ Show in Las Vegas, professional remodelers cited increased consumer confidence and demand as a reason for the uptick in spending.
Paul Emrath, Ph.D., NAHB’s Assistant Vice President for Surveys and Housing Policy Research, predicts that the spending on remodeling owner-occupied, single-family homes will decrease by 0.6% percent in 2020, but increase 1.2% in 2021.
According to Tim Ellis, the 2019 NAHB Remodelers Chair, remodeler certainty remains at a high level because remodeling generated $158 billion in 2019.
“Although there is steady consumer demand in all areas of the country, the biggest challenge continues to be the cost of, and lack of, skilled labor to meet the interest.”
– Paul Emrath, Ph.D.
Remodelers quote a few reasons for the slow growth in remodeling spending.
“We’re not only seeing more requests for proposals because the housing stock is limited, but also a higher request for aging-in-place work because boomers want to stay in their homes longer. Because people are choosing to stay in their homes, the demand and backlog for remodeling remains high.”
– Nick Scheel, CGR, remodeler from Spokane Valley, WA
However, experts claim that the growth we’re seeing in the remodeling market could rise more quickly except for the lack of skilled labor in the field.
Although the economy shows signs of slowing down ever so slightly, the risk of recession is low, and according to experts, remodeling should keep pace with inflation into 2021.
Local Perspective
In or corner of the world (central Florida), new construction and existing home sales remain hot. New developments focusing on houses priced in the $200,000 to $250,000 range move quickly. On the real estate market for existing homes, anything in good shape under $200,000 usually doesn’t last more than a week and often no more than a few days.
Younger homebuyers are simply being priced out of this sector of the market, leaving them few options that are genuinely affordable. Remodeling a fixer-upper is a good possibility. The trick is knowing what your total budget is, finding a home that has real potential, and knowing what kind of work the home needs. For more patient homebuyers, it can be a way to get into a neighborhood you really want to live in or getting the kind of square footage and/or layout you’d like.
Either way you look at it, professional contractors in our area have no trouble finding work whether it’s on the new construction or remodeling side. Like Dr. Emrath said, finding skilled labor is the number one factor keeping builders and remodelers from being able to take on more work.
Would you rather remodel or move? Check out this article and let us know in the comments what you think!
