The projections that remodeling activity will create a thriving market in the 1990s have caused many building supply home center retailers to take notice, and a recently released survey reveals that homeowners are confident enough to do much of that work themselves. The report on the 1987 American Housing Survey, recently issued by the Bureau of the Census and the Department of Housing & Urban Development, indicates that the D-I-Y segment of the remodeling market will be a force to acknowledge and address.
Of the seven remodeling categories included in the survey kitchens, baths, roofing, siding, storm doors and windows, insulation, and additions 16 percent of owner-occupied housing units had all or part of the roof replaced during the two years preceding the 1987 survey. About 9 percent of all homes had recently undertaken some bathroom repair, remodeling, or addition work, and similar work on the kitchen area was performed on about 8 percent of all housing units.
Homeowners clearly are confident about delving into some kinds of projects on their own, although for others they seek out a contractor with the special trade skills needed (see table below). Almost 60 percent of all bathroom repair and remodeling projects were reported as mostly done by household members. On the other hand, household members did only 25 percent of the roofing jobs.
Many of the repair and remodeling jobs in the 1987 survey were of the relatively small maintenance, or fix up variety. This accounts for the surprisingly large share 46 percent of all projects that were completed by household members instead of professionals. In total, about 59 percent of all jobs in the seven specific categories were estimated by the household respondent to have cost $500 or more. Eighty-seven percent of all additions built were reported to have to cost more than $500, and only about 27 percent of insulation jobs cost more than this amount (see chart).
An above average share of households in the Midwest and Northeast undertook repair or remodeling projects in the two years preceding the survey period. There was considerable variation in the frequency with which projects were DIY or contractor performed, with households in the Midwest reporting by far the largest share of DIY. For example, 62 percent of households in the Midwest reported that their kitchen projects were mostly done by household members vs. only about 52 percent for the other three regions in the country combined. Similarly, 66 percent of Midwestern households undertaking bathroom repair or improvement work did the work themselves vs. 61 percent of households in the West and 56 percent of households in the Northeast and the South.
Regional hot spots
Regional trends in home remodeling activity confirm what building supply home center retailers have long known D I Y sales have traditionally been stronger in older urban and suburban areas, which tend to be located in the Frost Belt. Last year, for example, metropolitan areas along the Northeast seaboard dominated the top market list of spending for home improvement projects. Although per capita spending on remodeling remains relatively strong in the Northeast despite a sharp economic downturn, growth is shifting to other areas.
Midwestern cities are the biggest gainers in remodeling activity this year. The remodeling market grew by more than 25 percent in the Chicago area during the first half of this year. Additionally, Detroit has moved into the top 10 remodeling markets nationally through the first half of 1990. Selected West Coast markets are also seeing strong remodeling growth. Spending is up anywhere from 15 to 30 percent this year in San Diego, Los Angeles, San Francisco, Sacramento, Portland, and Seattle.
Cahners Economics has put together a list of the projected top 10 remodeling markets for 1991, based on values of remodeling permits. These metropolitan areas are Los Angeles; Chicago; Washington, D.C.; San Francisco; Philadelphia; Detroit; New York; Baltimore; San Diego; and Newark, N.J.
In many areas, remodeling is an effective hedge against a downturn in home building. At the very least, remodeling is less cyclical than home building, so downturns are not as severe. For building supply home center retailers, diversification of the customer base to include home builders and remodelers as well as the serious or novice DIYers will make it easier to survive tough economic times.