Do Foreclosures Boost The Remodeling Industry?
What can we learn from West Virginia? Besides the latest in logging, coal mining and caving? According to the WV News & Sentinel, we can learn that the remodeling industry is picking up significantly; and the news & sentinel credits the high foreclosure rate with this boost! So are cities with more foreclosures actually seeing higher remodeling numbers? What are you seeing in your city?
Construction pros: More opt to remodel
January 30, 2011 -
A report recently released by Harvard University's Joint Center for Housing Studies indicates the U.S. home improvement industry will grow in the future, and some local folks in the business agree the industry has a bright future.
Keith Malone, owner of Marietta, WV-based Malone Renovations, said he's been "very busy" lately. "Things have been really good," he said. "We are getting a lot of calls for home improvements and remodeling." The report, titled "A New Decade of Growth for Remodeling," is the sixth and most recent report in the Improving America's Housing series, published by the Remodeling Futures Program at the Joint Center for Housing Studies.
According to the report, remodeling spending was over $325 billion in 2007. By 2009, remodeling spending dropped 12.5 percent from that figure because of the housing crash and economic recession. In the next five years, spending on remodeling is anticipated to grow at an average annual rate of 3.5 percent. There are a number of reasons why the industry is expected to make a comeback, the report says.
For one thing, many houses that have been foreclosed are in need of improvements. Additionally, more homeowners are making improvements to their older homes, rather than moving to new ones. The study also points out that household income is supposed to increase. Malone acknowledged that folks are renovating more than they're building new these days.
"Remodeling across the board has been very strong, but I'm getting very few calls for new construction," he said.
Denver Horn, owner of Belpre-based A1A Home Improvement, said he's experiencing the same thing.
"I used to build a lot of homes, but the homes business has slowed down and we're doing more remodeling," he said. In fact, Horn said, the remodeling business is "booming" right now. He said folks are asking for bathroom and kitchen remodels, as well as room additions, but they're also getting new siding, roofing and windows installed.
"That's the main thrust of our business," he said. "It's something you can get into and get out of pretty rapidly - I can do a roof in a day, day-and-a-half. With bathroom remodels, you're looking at a month to do it." According to the Harvard University study, homeowners will focus on improvements that will pay off in the long run, such as making energy efficient retrofits.
CBS' Money Watch website, www.moneywatch.bnet.com, features a list of the most popular remodeling trends for this year, and "going green" is among them. While they acknowledged that the home improvement business is strong right now, both Malone and Horn said some folks are still cautious with their spending.
"People are being cautious - they're getting bids," Malone said. "People are still willing to pay for quality, though - quality work and quality components."
"They say, 'I'm not building a new house, but what I do in my remodeling and renovations, I want it top-notch,'" Malone added. Horn said he's seen both sides of the coin. "I think that people are still cautious, but some people say, 'It's the last hurrah, I'm gonna make it as nice as I possibly can' - it depends on the customer and their attitude," he said.