Ever since the recession, many homeowners have turned to upgrading their existing homes rather than moving up. But the amount spent on those improvements was limited due to the financial downturn. A recent study conducted by the Joint Center for Housing Studies of Harvard University indicates that home improvement spending is on the rise as homeowners regain equity and feel more comfortable putting more money into bettering their houses.
Recovering home prices, a stronger overall economy and government rebate programs that encourage energy efficient upgrades all are contributing factors to the impetus among homeowners to spend more on enhancements.
Baby boomers and Millennials are two demographics that are having a dramatic effect in the home improvement sector. Boomers are adapting their homes to a more Universal design concept, which will allow them the accessibility needed to live comfortably and safely in their houses as they age. As a result of the green movement, they’re also implementing sustainable improvements, including adding solar, replacing old windows for dual pane varieties, upgrading HVAC systems, replacing aging roofing and swapping out old appliances for more energy efficient ones.
Millennials, those who came into adulthood around the turn of the century, have spurred on improvements by rental property owners and once they become a significant force within the residential housing market, they too, will add to the growth of the home improvement realm.
The majority of this spending increase is centralized in urban areas that boast higher incomes and home values. Homeowners in metro areas spent 50 percent more on home improvements than those who lived in non-metropolitan areas. Homeowners in coastal metro areas tend to lead the charge on the amount spent on making enhancements to their homes.
Large dollar, discretionary projects such as kitchen and bath remodels or room additions tend to also be centralized in metro areas with the highest home values.
As home prices and income levels continue to recover from the recession, home improvement spending should keep pace. For homeowners in the Silicon Valley, including Palo Alto and Redwood City, this is a positive turn to what to events of just a few years ago.
The Joint Center for Housing Studies of Harvard University was formed in 1959 and during its 58 years, has dramatically changed its mission. Today, their purpose is to ‘investigate and illuminate housing’s critical role in the economy and in communities’ and their research serves as a valuable resource for numerous bodies.
Read the complete “Emerging Trends in the Remodeling Market”.