Remodeling on the Rise

Irvine, CA (Vocus) January 24, 2008

As home sales flatten nationwide, an increasing number of homeowners are looking to remodel and renovate rather than purchase new homes. According to the Joint Center for Housing Studies at Harvard University, the nation's leading center for information and research on housing in the United States which analyzes the dynamic relationships between housing markets and economic, demographic and social trends:

  • About a third of owner-occupied homes are at least 45 years old and an additional third is between 25-45 years old meaning that a large majority of homes are in increasing need of remodeling and repair.

  • An aging housing stock, rising energy prices, strengthening rental demand, and the changing mix of homeowners will contribute significantly to future growth in the remodeling sector.
  • Between 2005 and 2015, the number of homeowners will increase by over 12 million and average per household spending will grow by 23 percent.
  • By 2015, members of generation x will represent the largest share of homeowner improvement spending of any generation, with 27 percent of all spending. Meanwhile, trailing baby boomers will hold strong at 23.6 percent of spending and lead baby boomers will contribute 21.3 percent of spending.

The amount homeowners spend on remodeling has been climbing in the United States since 1996, according to U.S. census figures. The popular home-repair referral service, Angie's List, just concluded its annual poll which indicates on average home owners responding to the survey say they plan to spend 2.9 percent of their home's value, roughly $11,250 on repairs and renovations this year up 13 percent from 2007.

Systems Paving, Inc, America's leading installer of durable, interlocking paving stones, has witnessed growth in every market of their 13 locations throughout Calif., Ore., Wash., Colo., Tex., NY and Ga. The company's recent expansion into Washington D.C. and Novato, California, demonstrates the increase in volume as does their plans to open up additional locations across the U.S. The reason for their success is that they focus on established homeowners. Many, including baby boomers, still subscribe to the adage that the home is the most important investment that a person will make in his lifetime. Therefore, they improve their homes and plan on staying for the long hall. Riding out the real estate market is not a concern.

As home sales decline, home improvement is moving beyond the indoors and expanding outwards. Landscaping and yard work are two of the most popular remodeling projects. Modern yards, patios, terraces and decks have become places to retreat, relax, play and entertain. As such, homeowners are now seeking to add square footage to usable living areas through the creation of “outdoor rooms” also known as “hardscapes” which serves as an extension of their personal style.

Outdoor Home Improvement — A Booming Billion Dollar Industry

Over the last decade the industry has seen solid growth, nearly doubling in size to a new high of $280 billion in 2005. And, spending on remodeling is anticipated to increase 44 percent by 2015.

Systems Paving, America's leading installer of durable, interlocking paving stones, provides the tips below as the primary reasons to “upgrade” outdoor hardscapes:

  • Sit Tight in the Real Estate Market Down-Turn — The recent slowdown in home sales means owners are staying in their homes longer. Instead of selling, increasing factions are opting to invest in beautifying their existing spaces. The proliferation home makeover media has also helped drive the trend toward improving lifestyle at home.
  • Take Advantage of Increasing Home Equity / Tax Benefits — With aggregate home equity at $10.2 trillion in 2005, and almost a trillion dollars outstanding in home equity borrowing, homeowners have the means, as well as the motivation to continue to invest in their homes over the coming years. Plus, revamping outdoor surfaces qualifies as home improvement, and may have some tax advantages.
  • Repair a Nation of Aging Homes … With Something More than a Band-Aid™ — With two-thirds of homes now at least a quarter-century old, growing numbers are in age ranges where improvement, remodeling and repair spending is traditionally high. As all rigid hardscape materials eventually crack and deteriorate, savvy consumers are choosing not to “pave over” the problem. Instead, they are opting to give home exteriors a paving stone “facelift,” which is virtually impervious to damage. By spending money in the short-term, these consumers reap large rewards in the long-run.
  • Designer Driveways are the New Status Symbol — Driveways have surpassed garages as the display case for vehicles since the average house often lacks a basement or an attic. Homeowners are forced to find room for their recreational equipment, seasonal decorations and hobbies in the garage leaving little or no room for the family car. Homeowners are willing to invest in patterned driveways that give their home character and reflect their lifestyle much like the interiors of their homes.