Where Are Homeowners Spending Remodeling Dollars?
Room additions remain the most expensive remodeling projects.
Whether it’s a professional bath remodel or an exterior refresh, homeowners are finding ways to make the most of their remodeling dollars. As the annual spend on housing repairs has grown to an all-time high, Harvard’s Joint Center for Housing Studies released a report that breaks down the categories where homeowners are choosing to invest. Here are some of the top areas from highest expenditures to least, along with notes for helping remodeling clients decide whether or not they’re ready to take the plunge.
It’s no shock that additions are the most expensive items in the Harvard study, especially kitchens and bathrooms. More surprising is the average cost of a “recreation room,” which, at almost $27,000, likely encompasses home theaters and incorporated smart devices. This is why it’s important for remodelers and builders to stay informed on the latest home tech products.
Per the Harvard study, “As natural disasters become more frequent and more devastating, homeowner outlays for disaster-related improvements [were] nearly double the two-year average of $14 billion two decades earlier.”
The cost was highest in the Midwest and South, areas that suffered from severe storms and flooding. Expect an uptick in the Southwest, as disaster repairs increase in the wake of wildfires.
Kitchens are one of the most heavily-used parts of the home. Investment in high-quality finishes will often provide a longer physical lifespan, holding up to countless meals, snacks and children who forgot to take off their soccer cleats.
This category includes patios, decks and garages. Garages are naturally the cost leader here, but patios are worth special consideration as they’re practical, fashionable and a solid boost to a home’s value.
To help your clients obtain the patio of their dreams, check out this how-to on using paver base panels to eliminate the need for a gravel bed.
As the study clearly states: “With the aging of the housing stock, homeowners now spend nearly half of their improvement dollars on replacement projects.”
Roofing is typically the most expensive project, with an average cost of $7,674, but window and door replacements were slightly ahead in terms of project volume (3.7 vs. 3.4 million).
Like kitchens, a professional bath remodel involves several trades and presents a range of finish options. In the study, “minor” remodels averaged about $3,400 while a typical “major” bath remodel came in just over $23,000.
Part of establishing a remodeling business is deciding whether you want to provide quick and affordable remodels or more elaborate custom work. But don’t be tempted by large dollar figures!
Yard or Lot Improvements
The majority of the yard or lot improvement category is comprised of sprinkler systems, fencing and retaining walls, and driveway work, while bigger ticket items such as pools and tennis courts boost the dollar value. This shows an interesting split between maintenance and luxury additions.
In general, the study found that replacement projects take up a larger share of homeowner improvement budgets now than before the recession. Insulation, carpeting and flooring are the biggest single items in the Interior Replacement category, although they are often rolled into a larger overall project, such as a general remodel.
The study defined “systems” as plumbing fixtures, DWV, wiring, HVAC and appliances. Interestingly, the authors found 30% of owner expenditures were on projects with the potential to reduce home energy costs. This was especially true in areas with older housing stock and more inclement winters.
The takeaway? Modern homeowners in older homes are energy conscious, and contractors who can demonstrate long-term energy savings will have a leg up on their competition.