Remodelers will be happy to hear the latest optimistic news from RemodelOrMove.com. The organization’s Spring 2013 U.S. Remodeling Sentiment Report shows strong growth in higher-end projects and a decline in the do-it-yourself remodeling that grew during the recession.
According to the latest survey results, 58% of homeowners report that the economy is having minimal effect on their remodeling plans. This is up from a mid-recession low of just 33%. Additionally, three-quarters of homeowners (73%) say they plan to hire a general contractor for their project, and more than half (55%) will hire an architect. A full 80% of respondents say they plan to do little to none of the work themselves.
It’s little surprise that kitchen and bathroom remodels tie for the most popular projects with 57% of homeowners reporting that these projects are part of their remodeling plans. The report shows that the average estimated cost for planned remodels has reached $114,000 to remodel or add on an average of 3.6 rooms, which is up from $80,000 and 2.6 rooms at the lowest point of the recession. RemodelOrMove.com says that the “wealth effect” is helping to fuel the recovery in home remodeling. Survey respondents reported having an average home equity of $130,000 — the highest amount since 2009.
Implications for the Future
While the current data is promising, a correction back to higher DIY numbers could be in the cards. “Do-it-yourself home improvement has been, and will likely continue to be, a feature of the U.S. home ownership picture,” RemodelOrMove.com says in its report, noting that the recent decline in interest is likely a short-term result of the economic recovery. “Homeowners who are better off financially are proceeding with their remodels by hiring others to do the work, while homeowners who are more budget-conscious and more inclined to do some of the work themselves are slower to start their remodeling projects. It is likely that as the economic recovery expands, more homeowners interested in DIY will begin planning remodels and the sentiment report will show a ratio of DIY and hire-it-done more in line with pre-recession numbers.”
Remodeler Kevin Anundson is president of the OAR Group in Milwaukee, Wis., a company that specializes in owner-assisted remodeling. Because of the company’s focus, Anundson says that OAR has a disproportionate number of projects in which the homeowners want to get involved, but the company also has numerous start-to-finish renovations without homeowner participation.
“The economic challenges we’ve had over the past several years caused the higher-cost remodeling projects to be placed on hold for quite a while,” Anundson says. “Typically, even the homeowners who want to get involved do not do much in the larger projects because their involvement would likely cause delays and not result in significant cost savings compared to the cost of the overall project. Now that there is at least a perception by some that the economy is recovering, they are tired of waiting and are finally pulling the trigger on getting going. This is great news for all of us in this industry.”
Anundson says that homeowners with funds available to start spending on remodeling projects again will help kick-start both the industry and the economy. “From there, the engine starts running a little better and a little smoother each day,” he says. “The fact that [homeowners] prefer not to do any of the work themselves is also great news for [service providers]. We’re thrilled to trade our expertise for our clients’ hard-earned dollars, and the less they choose to take on themselves, the faster we rebuild our economy. It’s an awesome circle.”
—Lauren Hunter, senior editor, REMODELING. twitter.com/LaurenHunter_HW