Home remodeling trumps moving in current market
Houzz survey finds the majority of U.S. homeowners plan to stay in their home for the long term.
With the exception of millennials, the majority of U.S. homeowners (66%) who are remodeling plan to stay in their home for the long term, according to the third annual Houzz & Home survey. Fifty-three percent of U.S. homeowners say they are remodeling to increase the resale value of their home, but have no plans to move in the next five years, and 16% plan to sell their home in the next two years.
While homeowners remain cautious about the economy, three quarters (74%) said their local housing market has improved and there was a significant drop in the percentage of homeowners who said funding their renovation project or staying on budget was a challenge this year (19% vs. 27% in 2013). Those who report a significantly improved local housing market are more than twice as likely to be planning to remodel (42%) than they are to move (16%) in the next two years.
Among those planning to remodel, one in five (22%) feel that prices are rising too fast to consider moving at this time and a quarter (24%) would prefer to move but say remodeling their home makes more economic sense. When it comes to buying a home, high home prices are particularly prohibitive for homeowners in the West (26%) with San Jose, Calif. and San Francisco topping the list at 39% and 36%, respectively, and for single homeowners (29%).
Millennial homeowners are more likely than other age groups to aspire to move to a new home in the next five years, and 36% of them are remodeling to increase home value with an eye on moving to their next home. Only a quarter of respondents in all other age groups are similarly motivated.
“The investment that people make in their homes is not only a financial one, it’s also a very emotional one,” said Liza Hausman, vice president of Community for Houzz. “Rather than opting to move, the majority of Houzz homeowners undertaking renovation projects are choosing to do so because they want to stay in their home, not because they can’t afford to move. Significantly more homeowners on Houzz are able to fund their remodeling projects this year compared with last year and we see them investing to create a home that meets their needs now and for the long-term.”
Bathrooms and kitchens are the most popular renovation projects again this year, with 26% of respondents planning a bathroom remodel or addition and 22% planning a kitchen remodel or addition in the next two years. Kitchens continue to receive the highest share of dollars overall with U.S. homeowners spending an average of $26,172* to remodel this space. Homeowners in the Northeast and West, who tend to spend more on their renovation projects and have larger project scopes overall, spent an average of $32,155 and $29,411, respectively on their kitchens (vs. $23,946 in the Midwest and $21,894 in the South).
The study also found that homeowners are ‘doing more with less,’ with 76% saying that they retained their home’s existing footprint in their last remodeling project. Those with homes larger than 4,000 sq. ft. are twice as likely to make additions of 1,000 sq. ft or more (10% vs. 5%, respectively).
When it comes to replacement projects, flooring, paneling and ceiling are most popular at 27%, followed by windows/doors (22%) and roofing (15%).
A few kitchen and bath-specific findings:
- 39% of homeowners planning projects in the next two years plan to hire a kitchen & bath pro — among the most popular service providers.
- 32% of homeowners completed a bathroom addition or alteration in the past 5 years and 27% completed a kitchen remodel.
- Average spending amount for a bathroom addition or alteration is $13,941 whereas a kitchen remodel is $29,819, for those hiring a pro.
- Those who remodeled their kitchens were most likely to replace their countertops, appliances and add new lighting/get electrical work done.
- Those who remodeled their bathrooms were most likely to replace their flooring, plumbing, add new lighting/get electrical work done, get new tile work or replace their vanity/cabinetry.
- 19% of homeowners plan to purchase a kitchen appliance/appliances over the next six months.
The annual Houzz & Home survey is the largest survey of residential remodeling, building and decorating activity conducted. It covers historical and planned projects, the motivations behind these projects and the impact of the economy on home remodeling, building and decorating plans among the more than 20 million monthly unique users that use Houzz. The study yielded detailed data at the national, regional and metropolitan area level, which Houzz used to examine regional differences in priorities and spending.
You can download the full report at http://info.houzz.com/rs/houzz/images/Houzz%26Home2014_U.S..pdf
*Mean spend is among those who hired a pro/mix and DIY to complete all or part of their project. It also includes both major and minor renovation projects.