Remodeling Expected To Remain Hot Even As The Pandemic Eases
The demand for home remodels is expected to remain strong—even as the COVID-19 pandemic begins to ease as vaccinations rise and people are no longer trapped inside their abodes obsessing over all the flaws.
Renovation companies will stay busy this year and into next as homeowners finally get around to that big kitchen remodel or adding a home office, predict renovation experts. Homeowners are anticipated to spend about 4.8% more by the first quarter of 2022, according to the Leading Indicator of Remodeling Activity. The indicator, from Harvard University's Joint Center for Housing Studies, offers a short-term outlook for home improvement spending. The latest projection is up from around 3% last year, when many homeowners may have felt uncomfortable allowing crews inside their homes due to the pandemic.
However, the indicator expects there will be fewer do-it-yourself projects in the year ahead as more people get vaccinated and feel comfortable socializing, traveling—and getting out of the house and leaving the work to the professionals.
“With the pandemic keeping folks at home for so much more time, there was this intense focus on doing work on their homes," says Abbe Will, a research associate at Harvard's Joint Center. "We think that will continue this year, [but] with fewer DIY projects and more larger, discretionary projects and the ones that were deferred from last year.”
Many homeowners also have the money now to do these projects because of the pandemic. Those who remained employed over the past year may not have gone out as much or traveled, so they were able to put some of that money into their savings. Many received stimulus checks from the government. They were also able to tap into their home equity, as home values rose sharply over the past year as buyers rushed into the market.
"They’re using those funds to reinvest in their homes where they’re spending disproportionate amounts of time," says Will. “Homeowners are still trying to make their homes fit their needs. If working from home becomes more of the norm, homeowners [will] make those spaces in their homes, potentially [with] home additions to accommodate that."
Home sellers and those who successfully beat out the competition to become new homeowners are also likely to seek out remodeling and design firms. Sellers want to get their properties into tiptop shape, while new owners spend about 30% on renovations within their first three years of homeownership compared with other owners, according to the Joint Center.
But homeowners jonesing for their desired improvements may have to exercise patience. Backlogs for renovation and design companies have already doubled to more than two months in the second quarter of this year compared with the same quarter last year, according to the Houzz Renovation Barometer. The design and remodeling site found the construction wait increased to about 9.3 weeks in the second quarter of 2021.
It may be particularly tough to have a pool installed as searches for pool and spa professionals last summer were up three times from the previous one. Demand for landscape, deck and patio professionals more than doubled. However, fewer folks sought out creating more open-concept floor plans as the pandemic has dragged on and families spent more time at home together.
"Businesses are faced with soaring homeowner demand along with lengthy permitting timelines, supply chain constraints, and unrelenting labor shortages," Houzz Senior Economist Marine Sargsyan said in a statement. "These constraints likely contribute to industry-wide wait times of more than two months before a business can begin a new project.”