The housing market’s tailspin and recent economic woes drove home remodeling activity to what appears to be the bottom of the pit. Recent indicators show both the bottom of the dive and the first signs that after scraping the bottom, the industry is starting to rally. This seems to offer good news to homeowners and to those who work within the industry.
In line with projections from RemodelorMove.com, the first quarter 2009 Remodeling Permit Activity Report shows a 20% drop in the number of new remodeling permits issued compared to those issued in the same quarter of 2008. The number of permits issued is the most reliable indicator of current remodeling activity. This and previous permit activity reports are available at www.RemodelorMove.com/survey_reports.cfm.
Two major indicators promise the beginning of an upswing in remodeling activity during the second quarter: the latest “Remodeling Sentiment Report” and the current cost to remodel.
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The Remodeling Sentiment Report for the first quarter of 2009, which reports the forward-looking findings of a survey of 5,000 homeowners, indicates a 5% rise in the number of homeowners who plan to remodel in the next year. This is especially noteworthy because it is the first increase in this benchmark indicator since 2007, when more than 90% of homeowners surveyed planned to remodel within the year.
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The cost to remodel in May 2009 is 20% less than it was in 2006. As surprising as it sounds, this is possible because of huge rebates, tax credits and other incentives from the federal and many state governments and utility companies, the vast number of sales on building materials and remodeling products, and lower bids from contractors who want to stay busy and keep their crews working. Details on these savings are available at
www.remodelormove.com/content/article/article.cfm/remodel/why_is_a_bad_economy_a_good_time_to_remodel_your_home.
Other key details from the reports include:
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The major concern of survey respondents about remodeling is the cost (82%)
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While only 12% of survey respondents who plan to remodel expect to use premium materials, only 12% plan to use economy materials.
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A full 89% of survey respondents indicate that they have changed their plans for remodeling because of the current economic woes.
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The Southwest appears to have been the only region in the nation that recorded an increase in permit activity during each of the three months in the first quarter of 2009.
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Despite relatively modest declines in number of remodeling permits issued, the reports indicate a very steep decline in the cost of projects permitted and in the average cost of all remodeling permit valuations.
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There is, in fact, a steady decline in the valuation/cost of the projects permitted from January through March.
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Many of the projects undertaken in the first quarter (based on permit information) focused on repairs. In the Northeast, for example, the very hard winter and widespread damage to roofs would result in an increase in the number of projects, but would not indicate a significant growth in homeowner confidence.
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