The RemodelOrMove.com 2012 U.S. Remodeling Sentiment Report documents a continuing increase in the scale of remodeling projects that homeowners are planning, with an increase in the average cost of the projects, as well as an increase in the average number of rooms that users plan to add or remodel.
The annual survey is distributed to 5,000 homeowners who are actively planning to remodel but have yet to start their project. Homeowners’ growing preference for using luxury home products is a noteworthy trend, which indicates a top-down recovery for the remodeling industry, with higher-end products disproportionately increasing in use compared with the use of average-price and economy products. Remodelormove predicts this trend will probably continue until the economic turnaround becomes stronger and more widespread.
Other findings from the report indicating that the use of luxury products is a growing trend in home remodeling:
*Homeowners are describing the materials they will use in their remodels as “expensive” at the highest rate since 2008.
*The scope and scale of remodeling projects is the largest since 2007, with an average remodeling cost estimated to be $100,000.
*35% of respondents are reporting that the economy is not affecting their plans to remodel — the highest number since 2008.
*73% are planning to hire a general contractor — the highest percentage since the report started in 2006. As the scale of the projects increase, the use of a general contractor typically increases as well.
Other interesting results:
*Kitchen remodeling takes the lead as the No.1 remodeling project for the first time since 2008. The most popular project previous to 2008 was bathroom remodeling. This shift is another indicator that “luxury” is returning to what was a “practical” remodeling market. Many homeowners view a kitchen remodel as a luxury, while a bathroom addition or remodel is a necessity. “Bathrooms are less expensive to remodel, on average, so are easier to justify for families during financial uncertainty,” says RemodelOrMove.com founder Dan Fritschen.
*The “wealth effect”* is helping to fuel this return to luxury, as the average home equity reported by homeowners participating in the RemodelOrMove.com survey is $123,000 — the highest since 2009. (*The “wealth effect” is an economic term referring to an increase (or decrease) in spending that accompanies an increase (or decrease) in perceived wealth.)
Homeowners who responded to the survey said a dream home that meets all their needs would cost on average $113,000, and the average value of their existing home is $100,000. The near-equal costs of remodeling their current home and the cost to tell makes the remodel or move decision much harder to make.
Learn more about the U.S. Remodeling Sentiment Report. RemodelOrMove.com also offers a free iPhone app to help homeowners research remodeling projects.
—Nina Patel, senior editor, REMODELING.
More REMODELING articles about remodeling market data:
Decision Time: Survey looks at how consumers choose a contractor
2013 Surge in Remodeling? Both the LIRA and RRI forecast steady growth beginning in Q1 2013
Remodelers Upbeat in Second Quarter: Yet economy still a worry in some markets