Once thought of as a supporting actor in the housing industry, home remodeling is poised to take the spotlight. The growing fascination with home remodeling is generating new renovation trends and research. If you are not yet thinking of remodeling your home, chances are that you will be planning a home improvement project in the next five years.
Plaut & Plaut’s conclusion to their study (Decisions to Renovate and to Move; Journal of Real Estate Research; 2010; vol. 32; p.461-484) states, “Housing renovation is an important component of housing supply, yet one often ignored both in empirical analysis and in policy discussions about housing.” They point out that renovating a home was becoming a “substitute for moving.”
A possible cause for the trend in 2010 was twofold. First, many homes fell into disrepair during and after the Great Recession. During that time, many homeowners could not keep up with regular maintenance, let alone emergency repairs. And second, there was a lack of quality homes for sale immediately after the Great Recession. As foreclosure and REO home sales subsided, many homes for sale showed signs of neglect through deferred maintenance.
Fast forward to 2019, home sale inventory continues to be a major problem for the industry (and will likely continue into the next decade). But home remodeling is picking up the slack to improve the nation’s home stock, as well as help increase quality home sale inventory. However, industry experts are learning there are other reasons that homeowners are remodeling instead of moving. Trends that have been identified include seniors who are “aging in place,” and multi-generational homes.
Although a recent Freddie Mac study identified seniors who are “aging in place” as a cause of the ongoing home sale inventory shortage, aging in place is also stimulating home remodeling! Homeownership rates for seniors are much higher today than in past generations. Instead of moving to retirement communities or stereotypical senior housing, older homeowners are staying put and renovating their homes for comfort and style.
Multi-generational homes became popular again after the recession, when grandparents, parents and adult children pulled resources to live in one home. The trend continues as aging parents are moving in with their children, and young adults are moving back into their parent’s homes. Remodeling a home to accommodate several generations may require turning a basement into an apartment, adding a main level bedroom and bathroom or possibly building an addition to the existing home.
Even homeowners who decide to move are remodeling their homes. According to NAR’s Remodeling Impact Report (nar.realtor), functionality and livability are the top reasons to renovate for a home sale. Most homebuyers want a turnkey home that is functional, comfortable and energy efficient. Home sellers who improve their homes before selling typically sell faster and for more than those who sell their home “as-is.”
While “going green” has become a standard in home improvement, a Joint Center for Housing Studies of Harvard University (jchs.harvard.edu) publication “Healthy Home Remodeling: Consumer Trends and Contractor Preparedness” identifies healthy home remodeling as a growing trend. Healthy home building practices are intent on maintaining the physical and emotional wellbeing of the home’s occupants by using healthier building materials, such as “low-VOC paints and formaldehyde-free woods.”
When planning a remodel, home improvement experts recommend: create a budget and stick to it; only hire licensed contractors; and make sure your improvements have permits.
Dan Krell is a Realtor® with RE/MAX Platinum Realty in Bethesda, MD. You can access more information at www.DanKrell.com