The Great Recession that started back in 2008 has been a tough time for everyone. It was a difficult period for lots of businesses, including ours. It was rough time for individual homeowners, too; many homeowners even lost their homes.
But happily, things are looking better now. Much better. And one sure sign of that is the current boom in home renovations.
According to a recent report released by the Harvard Joint Center for Housing Studies, the amount spent this year on home remodeling and repairs is expected to hit $325 billion. That will be a record level of spending since the beginning of the recession.
3 Things Driving This Boom
In general, homeowners are motivated to initiate a renovation project for many different reasons. But experts believe that this current boom is driven primarily by three strong trends:
- Rising Consumer Confidence: According to a University of Michigan index, consumer confidence across America hit nearly 95% a couple of months ago. That’s the highest level recorded since the beginning of the Great Recession.
- Improving Economy: Though the economy hasn’t rebounded as quickly as many would hope, there’s no question that the Great Recession has drawn to a close. There’s still plenty of room for improvement, but overall, we’re better off economically than we’ve been in many years.
- Aging Housing: A sustained period of slowdowns in new home construction has resulted in a substantially increased average age of American homes. According to the National Association of Realtors, the median age of homes nationwide has increased almost 50% in just a couple of decades.
It all ties together: an improved economy with people more willing and able to spend, and older homes that can benefit from upgrades and improvements. It adds up to lots of home renovation projects.
Good News for All Homeowners
The boom in renovations is good news for all homeowners – even those who aren’t interested in a renovation. Because according to the Harvard Joint Center for Housing Studies, areas where there’s lots of renovation activity tend to enjoy stronger property valuations than areas with less renovation activity.
So if several of your neighbors are doing some renovation work, the value of your home will likely increase as a result.
Another Interesting Change…
The Harvard Joint Center for Housing Studies uncovered another interesting tidbit about this current renovation boom.
Until just recently, the majority of renovation projects focused upon maintenance-type projects. These types of renovation projects are driven more by necessity than desire.
But that’s changing.
For the first time since the recession began, many homeowners are making the decision to initiate a discretionary remodeling project. In other words, more homeowners are deciding to remodel just for the fun of it, and to make life more enjoyable for their families.
That’s the kind of renovation project we handle here at TLC. Our bathroom and basement renovations, for example. And we can attest to the big boost these kinds of projects offer to the quality-of-life families enjoy.
So it’s great to have the Great Recession behind us. May we never see its like again!