According to the Joint Center for Housing Studies at Harvard University, homeowners spent $92.4 billion remodeling their homes during the past 12 months. Although there was a modest drop in spending over the past four quarters ending with the third quarter of 1999, spending on remodeling is still strong. Kermit Baker, director of the Remodeling Futures Program at Harvard, says further gains in remodeling activity can be expected.
On the whole, owner remodeling activity has grown while rental remodeling has declined in the recent years. Kitchen and bath projects continue to be popular and replacement work has made up a significant share of remodeling expenditures. According to the Joint Center, the top remodeling markets include New York; Chicago; Philadelphia; Washington, D.C.; and Los Angeles. Baker predicts that a major growth sector in the remodeling market will be modifications to seniors’ housing. Remodelers will also find more opportunities for business in older urban areas.
Most remodeling firms are small. Mike Carden, CGR, chairman of the NAHB Remodelors Council, says that three out of four of NAHB’s remodeler members are doing less than $1 million per year in business. An estimated 22,000 NAHB members are involved in remodeling. About half of these members have less than five employees. The Commerce Department recently reported that the total number of companies involved in remodeling increased from 117,000 in 1992 to 177,000 in 1997 - a 50 percent increase over five years.