After a decade that saw a giant market crash and sluggish economic recovery, it's hard to get excited about anything having to do with housing... but on the bright side, people who have put off maintenance are slowly starting to channel money into remodeling, and the trend is pointing towards steady growth. Wondering which cities are poised for the fastest recovery in the remodeling industry? Click below to find out.
According to the study, remodeling spending peaked nationally in 2007, before the crash brought it down by almost 20 percent through 2009. Challenges to growth in the remodeling industry include depressed housing prices, homeowners "in the unenviable position of owing more on their homes than their homes are worth," high unemployment rates, and weak consumer confidence.
NEW ROOM FOR GROWTH
While the past few years have been bleak, the remodeling market experienced new growth in 2010, due to people buying and renovating foreclosure properties, making long-term energy-efficient updates to their homes for tax credits and other reasons, and baby boomers adapting their homes to accommodate "aging in place." Harvard senior research fellow Kermit Baker predicts, "Remodeling expenditures are expected to grow at an inflated-adjusted average rate of 3.5 annually for the next five years."
WHERE WILL THE STRONGEST GROWTH BE?
- The report predicts: "Based on local market conditions in 2009–10, several metropolitan areas appear well-positioned for an upturn in remodeling activity. While many of the stronger metros are among the traditional top-spending markets, conditions in a handful of other areas—such as Philadelphia, Baltimore, Milwaukee, and Chicago—also appear promising. These markets may be poised for faster recoveries because they have older housing stocks, higher incomes and home values, and a larger share of upscale remodeling expenditures. In contrast, less favorable market conditions point to slower recovery in overbuilt areas of Florida, as well as Las Vegas and Phoenix."
Read the full study here: R11-1: A New Decade of Growth for Remodeling