As the home mortgage market for new homes continues to be strained, a new report by the Joint Center for Housing Studies at Harvard University is predicting home improvement in 2011 to start on a new bull run. The report notes that remodeling expenditures will shift from high-end, discretionary projects to replacements and systems upgrades. As Baby Boomers age, remodeling and upgrading existing housing inventory may make more economic sense than trying to downsize depending on circumstances. The report identifies lower mobility and changing migration patterns as reasons for new growth opportunities.
“Metropolitan areas with rising house prices, older housing stocks, higher incomes and home values, and a larger share of upscale remodeling expenditures, such as Boston, San Francisco, and Los Angeles, are well-positioned for an upturn in remodeling activity,” says Eric Belsky, managing director of the Joint Center.
As more older Americans consider migrating to southern and western states, many opportunities for contractors to update older homes in these areas may be more affordable than new construction.
“Lower household mobility following the housing market crash means that in the coming years homeowners will increasingly focus on improvements with longer paybacks, particularly energy-efficient retrofits,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “Also, a slowing of migration to traditionally fast-growing Sunbelt metro areas means that, at least temporarily, more remodeling spending will remain in older, slower-growing areas in the Rustbelt and in California.”
See the full report entitled, “A New Decade of Growth For Remodeling”