Remodelers See Growth Ahead for 2017, Survey Finds

July 17th, 2017 by Editor

Construction professionals across the country are expressing strong confidence in the market for home renovation and remodeling, according to the Houzz Renovation Barometer for the second quarter of 2017.

The Q2 2017 Barometer reflected high quarter-over-quarter confidence for all industry sectors including architects, designers, general contractors/remodelers, design-build, specialty building/renovation and specialty landscape/outdoor, with readings of 63 or higher. (The greater the index value relative to 50, the greater the proportion of firms reporting increases in quarterly business activity than those reporting decreases.)

Services are in high demand, as indicated by the new Houzz Renovation Barometer Backlog Index, which shows the number of weeks before an average firm can start work on a new mid-sized home renovation or design project given its current project commitments. The index revealed an average backlog of four to seven weeks across industry sectors. General contractors/remodelers and design-build companies have the longest average backlogs nationally at seven weeks, and increasing to eight weeks in the West. Architects and companies in building and outdoor specialties report average delays of five to six weeks, while designers show just four week backlogs on average.

“The barometer is pointing to strong market conditions for home renovation professionals, with business confidence at similar levels observed this time last year,” said Nino Sitchinava, principal economist at Houzz. “Western firms stand out with an uptick in confidence year-over-year and backlogs of more than three months, in large part driven by strong job markets and significant home price appreciation over the past few years in urban centers.”

Backlogs vary significantly among the top 20 metro areas. In the Boston-Cambridge-Quincy, MA-NH metro, Seattle-Tacoma-Bellevue, WA metro, Portland-Vancouver-Beaverton, OR-WA metro, and San Jose-Sunnyvale-Santa Clara, CA metro, general contractors and design-build companies face backlogs of more than three months (13-14 weeks). In contrast, remodelers in Detroit-Warren-Livonia, MI, Chicago-Naperville-Joliet, IL-IN-WI, and Houston-Sugar Land-Baytown, TX metro areas have the shortest delays and are able to start work on a new mid-sized project within a month on average.

Home professionals continue to report a shift in their project mix toward larger-scale and higher-end projects, contributing to increased business activity. Half of the general contractors/remodelers and design-build companies surveyed report a year-over-year increase in kitchen and/or bathroom renovations in the first half of 2017 (49 percent). Furthermore, a significant share of remodelers report an increase in homeowners tackling multiple projects at the same time (38 percent), purchasing high-end products (30 percent) and working on fixer-upper homes (27 percent). Demand for smart home technology also continues to increase, as reported by 34 percent of professionals, along with aging-in-place projects (33 percent) and energy-efficiency projects (28 percent).

The full Q2 2017 Houzz Renovation Barometer can be found here.

 

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