By Will Cole, Divine Renovation
I was finalizing a contract with a client for a 2,000 sq ft addition when they said, “Ok this looks great, and talk to your suppliers and vendors to get some better pricing. I said ok, what should I tell them?
They said that their people, who were in the know, said there is a slow down in the economy, a recession had started and next year would be slow for everyone.
I responded, “I too have been told that. Every year, for the last four years now however, I don’t see it”. In fact, today, I drove around the parking lot at the mall for 20 minutes looking for a place to park. From my perspective labor and materials were in very short supply.
Texas is growing 1000 people a day. Studies from Metrostudy.com and the Joint Center for Housing Studies of Harvard University show that while several Metro areas across the country may be experiencing a reduction in remodeling spending levels, Houston remains the #2 market for new home starts in the country.
Housing Starts are up about 8.5%, some of that has to do with wider product offering and a greater share of moderately priced houses. Residential Renovations and repairs are on target to reach 8% projected growth in fourth Quarter 2019 in the Houston-The Woodlands -Sugar Land areas compare to the third quarter 2018 in which growth was 0%.
Americans spend more than $400 billion a year on residential renovations and repairs. A growing economy and stronger job market are boosting owners’ willingness to invest in home improvements.
Baby Boomers (ages 55 to 74) and Gen Xers (ages 40 to 54) combined represent 81% of renovating homeowners, with a 2018 median spend of $15,000 each. Millennials (ages 25 to 39) account for 14% of renovating homeowners, with a $10,000 median spend. Gen Zers (ages 18 to 24) account for only a small share of the renovation market (0.3%) and have the lowest median spending of $7,000.
Popular projects are kitchens, baths, room additions and outside living projects. Whole house renovations are surging possibly due to the aging population and people who have lived in their homes for 20 years and more. Those homes are aging too.
More often, homeowners are installing smart home solutions for security/safety, entertainment, climate control, and lighting when remodeling.
There are also more requests for healthy homes. Indoor air quality is the leading source of concern, driven mainly by worries over moisture, mold, and dust. Other major concerns included pests and water quality.
Therefore, in closing: The next time you go to your local home improvement store and have trouble parking, or you’re stuck on a street because of construction vehicles, be thankful that our economy is Houston Strong!