Harvard’s Joint Center for Housing Studies releases a report from the Remodeling Futures Program recently that forecast an increase in remodeling activity for the remainder of this year and on through 2013.
The Leading Indicator of Remodeling Activity (LIRA) predicts that home renovation activities in this country will increase by 12.2% to $128.9 billion by Q1 2013, more than doubling the predicted 4th quarter 2012 growth of 5.9% at $120.7 billion.
What does this mean for home improvement pros and contractors across the U.S.?
It certainly provides hope there will be more work for more home pros over the next few years and that the economy has turned a corner.
“It looks like we’re finally starting to see some improvement in the residential sector of the economy and that’s going to spillover to remodeling fairly soon,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “We think we’re going to see market improvement by the fourth quarter of this year and strengthening as we move into the first quarter of next year.”
He added that the solid single-digit growth from 2012 would lead to additional (possibly double-digit) growth next year.
However, he also made a very important qualifying statement at the end of his statement:
“As long as we don’t have any setbacks in the economy.”
And that’s the kicker. The economy has not been adding significant jobs and the troubles in Europe could bring down to Earth a lot of the rosier outlooks. Another concern is that the spending increase by homeowners has been based on credit purchases.
But we’re convinced many factors will allow the LIRA forecast to become a reality. Home sales have been increasing – the new home housing market’s sharp decline in June is a set back – and many of the contractors we’ve partnered with to help run their businesses tell us they’re getting much more work this year than in the past few. And many homeowners have been forced to stay in their homes because of recent economic woes and the inability to sell their houses in order to “move up”. This causes them to want to improve their homes in order to be more comfortable or to increase value to facilitate a sale. Finally, with credit restrictions loosening across the country, more people are able to borrow to make the changes they want.
Do you think there will be double-digit growth in the remodeling industry the rest of this year and on through 2013?