NAR_grey_logo-01

‘Remodeling Boom’ Takes Off

By Melissa Dittmann Tracey, REALTOR® Magazine

Despite fears of a double-dip recession, home owners are choosing to invest more money in upgrading their homes. Home owners who can’t afford to sell their properties and buy new are realizing if they can’t move anytime soon, they want to fix up the home they have.

Remodeling activity reached a record high during July, according to the BuildFax Remodeling Index, which has tracked residential remodeling activity since 2004. The July index increased 24 percent year-over-year to 130.4, the highest to date. It was the 21st straight month the index increased.

“As millions of Americans believe that they will not be able to secure a new home due to a variety of factors including tight credit, limited buyers and challenging job prospects, they are more and more turning to renovating and remodeling their current properties, sending remodeling activity to record levels,” said Joe Emison, Vice President of Research and Development at BuildFax. “However, this remodeling boom is leaving many of these properties under-insured, as the value of these renovations are often not being captured by the home owners’ insurance companies.”

BuildFax says it’s important for home owners to make their home insurance is up-to-date after major remodeling projects. Many home owners fail to increase the insurance on their homes to account for the remodeling projects, which means their insurance doesn’t likely reflect the true value of their home.

Melissa Tracey

Melissa Dittmann Tracey is a contributing editor for REALTOR® Magazine, writing about home & design trends, technology, and sales and marketing. She manages the magazine's award-winning Styled, Staged & Sold blog.

More Posts - Website

Comments
  1. Hi Melissa,

    Good read…the sad part is, we shouldn’t just wait to remodel our homes because we can’t move. The feeling of a fresh living environment is always so nice to have. I think this is why people like to go away on vacation – get away from home for a few days just to enjoy the relaxation of a different living environment.

    I personally like to touch up and add a few things from time to time – or even just move things around and de-clutter to make it all feel new again. New colours and new accessories give a whole new vibe and it should be common practice to spruce things up regularly…at least in my opinion.
    Andrew Brest
    Sundaybell

  2. Hi,

    My experience has been a little different in the NYC market. I think its safe to say that NYC is a very saturated market and is least likely to have an economic slow down. Not the case. I am an established contractor 25 years in the business . At this point, we have no work. They only calls we ever get these days are for absolutely necessary repairs. No one wants to spend anymore. The busy days are lone gone. Plus the addition the industry is getting severely undercut with the unlicensed and illegal market.

    I am looking for alternative businesses . What else is left to do?

  3. So is that the reason LOWE’S is closing stores across the country because of the remodeling BOOM! You’re full of crap. The guy above calls it the way that it is – yes there are people who are utilizing capital for improvements but I would say it is far from a BOOM perhaps an ALTERNATIVE, but if you can buy in this market place there are incredible deals of which most of them need “remodelling” – wherein may be the increase in business. Good point on the insurance but what about getting an appraisal for market value with the short sales and foreclosures, even with the improvements. As Hank Jr. so amply put it ” Thanks, but You can keep the Change!”

  4. Christian Loffreno, CRS

    In Fort Myers things are improving. We see it everyday. People are fixing up to sell at a higher price and bet out the competition as well. Improvements do help in a good or bad economy. I see more people at Home Depot than 2 yrs ago each time I am there. I can’t speak for the rest of the country, but SW Florida is doing much better.

  5. In my market the remodeling has been going well, that is as a lender I heavily push FHA 203k and Energy Efficient Mortgages on existing homes for those purchasing and refinancing. But here is the sad part, not many consumers and it gets even sadder, not many realtors know these programs exist. Its the best program allowed for those that can qualify as the terms and conditions are not only affordable but sustainable for our communities.

  6. Hello Melissa,

    I must say I agree with what you are saying. I am a General contractor in Austin texas and home remodeling and other home improvement projects seem to be booming here in Austin. Maybe its becasue property values are going up and people feel comfortable financially and want to spend the money on their home remodeling projects. Anyway that’s my experience. Thank you and great article.

ADD YOUR COMMENT