November 2019 Newsletter
Remodeling Stats and Spending Trends to Inform Your Improvement Plans
By Debbie Wysocki
Thinking about remodeling? You’re not alone. According to a report from the Harvard Joint Center for Housing Studies, home improvement spending in the U.S. is up more than 50% since 2010.
The study found that, “Spending on improvements and repairs to the US housing stock continued on an upward trend in 2017, setting a new high of $424 billion. This represents a 10% increase from 2015 and more than 50% gain from the low in 2010.” According to their analysis, 22 million homeowners across the country completed at least one home improvement project in 2017.
“The report[…] attributed part of the increase to a shortage of new construction and a reliance on aging housing stock that requires upkeep and repair,” said the New York Times. “Other factors include higher housing prices that have increased the available equity for home improvement loans, and a growing population of older homeowners who are financially equipped to pay for renovations.”
The primary “spenders” fall into three main categories: Homeowners using surging equity to make improvements, homeowners playing catch-up on deferred maintenance and updates, and rental property owners.
The average expenditure on home improvement was rather modest; 40% of participants reported spending less than $2,500, and almost 75% spent less than $10,000.
Most common improvements
The most common project in 2017 was adding or replacing flooring, with 5.2 million homeowners, or 7%, upgrading their floors (I have found that depending on the price point of the home, people will opt for wood or laminate in the bedrooms, porcelain or marble tiles — and new trend is epoxy coating for interiors floors — which is what we opted for in our dining room and hallway to match the family room Terrazzo.
In South Florida, we are finding many of the older homes have Terrazzo underneath whatever flooring was placed on top of it — and when that flooring is removed, the Terrazzo can be restored — and I have even found a few vendors who can install new Terrazzo (I tracked down the guy who did the Miami airport — it runs $40 per square foot). This is also a great option for outdoor pool deck as it stands up to anything — and they actually have beautiful TILES you can install that run between $12 and $25 per square foot.
he next most common projects were:
Remodeling is one of the services Florida Luxury Homes Group provides. You might ask WHY a Realtor would provide this service? The truth is that BUYERS want a TURN KEY home — and we are finding this to be true no matter what the price point.
Originally, I thought it was only true in the Luxury Market. About 15 months ago, I bid a job on a $5 million home that had great bones and was completely out of style — it was a heavy Mediterranean. We got two bids from contractors one at $400,000 and another just under $400,000 (with a lot of to be determined prices — having worked with the second several times — I knew he typically overcharged and would say ‘don’t worry, we are always fair). Then, I had my team of guys bid it — while they are not licensed, when we need to pull permits, they can pull them under one of my contacts — but this particular job did not require permits.
They came in at $200,000 — they finished this job in under 2 months — and it was spectacular. The owner loved the job so much, he no longer wanted to sell the home — the wife told me she didn’t think I could finish the job on time and she never saw anyone come in on budget and on time.
HERE are just two photos of BEFORE & AFTER
his is what we do for our clients — we watch your money like it’s our money. I am present every day on the job — and my TEAM does exceptional work.
Now — we are also finding Millenneals do not want to purchase a home where they have to fix it up either — they want turnkey.
AND, Investors are finding we can do the work faster and at a better quality than their own people — which yields them a higher price at sale.
So — having given you a TON of Information to digest — here is an article on Remodeling and why so many people are opting to update their properties.
In fact, I am one of them — we are investing about $70,000 in our primary residence — and this includes redoing ALL of the flooring, updating the master suite, the cabana bath, new lighting throughout, creating a screened in back patio, updating the Laundry Room to modernize it and make it more workable for a combination space for laundry and my assistant, updating my son’s bedroom, and installing new doors, crown molding, new base, and completely painting inside and out, solar panels, and re landscaping.
As you can see — I am very good with the budget 🙂