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Monday, January 16, 2017
Hammer time: How Dallas fits into a fixer upper market on the rise
ORLANDO — The increase in home sales since the recession has also caused a boost in remodeling.
Seems that folks are more likely to pay for fix-ups when they are getting ready to sell their house or just bought one.
"There has been an uptick in housing sales, which is very important for the remodeling industry," said Nino Sitchinava, an economist for Houzz, a website for home remodelers and consumers. "The largest share of home sales are to second- and third-time homebuyers, which is actually great for the home renovation industry.
"There are a lot of dollars concentrated on the recent home buyers and those who plan to be home sellers."
Homebuyers who remodel spend an average of $67,000 on their renovations, Sitchinava said at this week's meeting of the National Association of Home Builders in Florida.
"We are seeing rising project budgets," she said. "Fifty percent of the remodelers are saying kitchen and bathroom projects are up and high-end renovations have increased as well."
Sitchinava said the U.S. home improvement and repair market was forecasted to grow to $355 billion by the end of 2016.
"At the very end of 2016, the industry was projected to grow by $20 billion over the peak in 2006," she said.
A third of remodelers interviewed by Houzz said that 2016 was the best year for their business in a decade. And three-fourths of the renovators said their business was above the average before the recession.
Sitchinava said homeowners over age 55 account for the biggest increase in remodeling.
"Baby boomers are going to be carrying this industry through the next year," she said. "The 55-plus market is roughly 50 percent of renovating homeowners.
"They are also the biggest spenders, with and average of $70,000-plus spent," Sitchinava said.
In North Texas, home sales hit a record high in 2016 with more than 101,000 preowned homes changing hands. Remodelers say their business is good.
"2016 was a great year for remodeling contractors, and we look to 2017 to be just as good," said Kim Savelsbergh, executive director of the National Association of the Remodeling Industry's Greater Dallas chapter. "Many new homeowners want to stay close to downtown, so they look to Dallas or the older suburbs to purchase and then remodel.
"Also, current homeowners want an updated house but can't always get the same square footage, location, etc., in a new home, so they look to remodel their current home," Savelsbergh said.
Dallas is one of the top remodeling markets in the country, according to industry estimates.
Homeowners who just moved spend an average of 90 percent more on repairs and upgrades than owners who stay put, said Paul Emrath, vice president for survey and housing policy research for the National Association of Home Builders.
Potential sellers also spend on remodeling, but not as much as new owners, he said.
"For every $9 people spend after moving into an existing home, someone has spent about $4 to get the home ready for sale," Emrath said. "Increasing the value of your home is one of the motivations for remodeling."
Emrath said the nationwide remodeling industry didn't suffer in the recession to the extent that home starts declined.