|by Elizabeth La Jeunesse|
Every two years, the Joint Center releases a report about the national home improvement industry. This year’s report, Emerging Trends in the Remodeling Market, includes analysis of trends at the metro area level. Metro area analysis is important since trends often vary in diverse areas of the country, especially along dimensions such as household income, home values, and age of the housing stock.
Our 2015 report includes estimates of home improvement activity levels for the 50 largest markets in the U.S. We estimate that the median market size was around $1.4 billion in aggregate remodeling spending by homeowners in 2013. Not surprisingly, the New York metro area was the largest market at $12.2 billion. As expected given their size, other large markets included Washington, DC ($6.7B), Los Angeles ($6.5B) and Chicago ($4.5B).
On average, just under one in three homeowners undertook one or more projects in 2013, and the average amount spent per owner was around $2,500 (or just over 3 percent of homeowner incomes). Average homeowner spending in fact ranged widely from less than $2,000 in areas such as Detroit and Las Vegas to as high as $5,000 in Boston and Washington, DC. Our interactive map illustrates the range of spending among the nation’s largest markets. As the map shows, average remodeling expenditures per owner were highest on the coasts.
One finding that surprised us, however, was that the share of homeowners undertaking projects of any amount was actually higher in interior markets of the country. For example, more than a third of homeowners undertook projects in Louisville, Milwaukee, Buffalo, Denver, Phoenix, Indianapolis, Kansas City, Pittsburgh, Oklahoma City, and Rochester. The older age of the housing stock in many of these areas is likely driving some of this higher-than-average project activity.
By comparison, coastal areas typically saw lower shares of project activity. For example, in Boston and Washington, DC, the share of owners undertaking projects was less than a third, and in New York and Los Angeles only around one in four homeowners undertook a project. Major coastal markets in Florida (Miami, Jacksonville, and Orlando) saw even lower shares at 23 percent or less.
Although activity rates were lower, average per-owner-spending levels were higher on the coasts, owing mainly to higher property values and incomes, which allows some households to perform more high-end projects. For example, we looked at the share of homeowners spending at least $50,000—a considerable price tag for many households. The segment of households undertaking these high-cost projects is very small, not exceeding 2 percent of all homeowners. Yet this small group of power-spenders considerably boosts average market spending in many coastal metros.
This map shows those markets with the largest share of high-end spending, including Boston, Washington DC, and New York.
Source: Table A-5, Improving America’s Housing—Emerging Trends in the Remodeling Market, The Joint Center for Housing Studies, 2015.
For more detailed information on remodeling activity in metro areas, see Chapter 4 of our recent report.