Things may be looking up nationally for remodelers, but locally the prospects can be dramatically different, the latest Residential Remodeling Index (RRI) shows.
We reported in February that every metropolitan statistical area in the United States can look forward to increasing remodeling activity this year, with growth averaging 4% and the nation as a whole set to reach an unprecedented level of activity by the third quarter. But take a look at Metrostudy's list of the top 10 metropolitan statistical areas in the RRI, based on the composite ranking index:
|4Q2014 Rank||Market||RRI Forecast 4Q2015||Growth Index||Demand Index||Composite Ranking Index|
|3||San Antonio-New Braunfels, TX||129.5||78.0||92.1||99.9|
|4||Austin-Round Rock, TX||130.9||67.5||92.9||97.1|
|5||Houston-The Woodlands-Sugar Land, TX||131.3||58.0||98.6||96.0|
|6||Dallas-Fort Worth-Arlington, TX||125.6||61.7||99.2||95.5|
|10||Hartford-West Hartford-East Hartford, CT||96.0||94.5||90.3||93.6|
And now look at the bottom 10:
|381||Carson City, NV||73.9||28.6||0.7||34.4|
In effect, what RRI is saying is that certain markets, predominately in Texas, have economic conditions at least two and nearly three times more favorable for remodeling than do other markets, many of which are in Georgia and Tennessee. That conclusion is based on a composite ranking index that takes into account three things: how a market is likely to perform in the fourth quarter of this year compared with what it did in spring 2007 (the "RRI Forecast 4Q2015" index); that market's prospects over the next few years (aka the "Growth Index"); and how big that market is compared with the biggest one, New York (the "Demand Index.")
In the case of top-ranking Midland, Texas, the fact that the near-term forecast ranks among the nation's best is more than enough to compensate for the market's relatively small size, as shown by the demand index. Several markets in the bottom 10 also have near-term prospects topping 2007's--the last time remodeling activity nationwide peaked--but prospects are weak and market size is puny.
The RRI is produced by Metrostudy, a sister company to REMODELING.