We are in a big-time remodeling boom. At TLC Inc., of course, that’s big news to us, since much of our business is centered around home renovation work – basements and bathrooms, for example.
And since we’ve been quite busy lately, we certainly knew that the market had picked up. But still, we were a bit surprised to learn just how much home remodeling was booming nationwide.
According to a report released last month by BuildZoom (prepared jointly with MIT’s Urban Economics Laboratory), the current size of the U.S. remodeling market is about $300 billion yearly.
That’s a big market! But that wasn’t the most interesting news in the report…
Remodeling Nearly Matches New Construction
According to the report, the value of home renovation work has very nearly reached the value of new home construction. New home construction for the same period was valued at $340 billion.
Think about that. All of the new home construction in the United States currently exceeds the value of home renovation work by only 13%!
The report also released some interesting comparisons between the recoveries in new construction vs. remodeling since the beginning of the recession. If you go back to 2005, and compare the levels of new home construction today with what it was then, new construction has only recovered 11.6%.
And remodeling? It has more than recovered from the Great Recession. It’s at 120.2% recovery during the same period.
Another way to look at it is that new home construction is still far below the level it was at in 2005. It’s currently only at 60.7% of that level. But home remodeling has not only fully recovered, it’s actually at 3.4% above 2005 levels.
Why the huge difference between the recovery rate between new home construction and remodeling?
You’d Rather Remodel than Build
It’s because far more people would rather remodel their current home than move into a newly built home. And far more people would rather buy an existing home and remodel it to suit their wants and needs, than have a new home built.
That’s really not surprising. Because home remodeling projects are a great way for homeowners to get exactly the home they want much more economically than building a home from scratch.
And most homeowners are quite happy with their homes. They like where they live; they like their neighbors, they like the schools. But that doesn’t mean that they are fully satisfied with their homes. Maybe they want more room and flexibility with a basement remodel. Or maybe they want a nicer bathroom. Or a kitchen upgrade.
Home remodeling gives those homeowners a way to have the home of their dreams while remaining exactly where they are – no uprooting of their family. A real win-win situation.
Looks Like We’re Going to Stay Busy
Home renovations comprise a large part of our business. So we certainly weren’t surprised to learn the home renovation market was doing well. But I’ll admit to being a little surprised at just how great the renovation market was doing.
So it looks like we’ll be staying quite busy in meeting our customers’ increasing desires to start home renovation projects.
That’s OK. We like busy!