How to get the edge on remodeling, home upgrades trend
Existing home shoppers have a preference. They want a home that’s 10 years old or less. But today’s market is not like Burger King’s motto – buyers don’t always get their way.
According to the Census Bureau, over 90 percent of Tri-Cities region homes are over 10 years old. Look a little harder, and you’ll see that almost 70 percent in the Kingsport-Bristol metro area and 60 percent in the Johnson City metro area are 40 years old or older.
Some relief is on the way. Builders are putting up new homes in inventory as fast as they can after a decade of stagnation. It’s welcome, but there’s still a deficit.
A housing economy rule of thumb says a new home is built for every six existing homes sold. If that were the case, almost 10,000 would have been added between 2016 and the end of last year. But only 8,161 new home permits were pulled during that period. Why 2016? That’s when the local market began it’s current sales pace.
It doesn’t take a math guru to see that the lack of new homes built since the Great Recession back in 2009 is one of the reasons we’re in such an inventory crunch today.
But that’s not the only complication. The number of refi loans beginning in the fourth quarter of 2019 until the second quarter of this year has outnumbered the number of home purchase loans. And the tenure – how long a homeowner stays in a home before selling – is increasing. It used to be seven years. The most recent Census counts show it’s now about 10 years.
Is it any wonder remodeling and upgrades are booming?
According to the Remodeling Futures Program at the Harvard Joint Center for Housing Studies, home improvement and repairs are expected to peak at $427 billion in the third quarter of this year. That’s a 20 percent increase from last year.
During the pandemic, people rediscovered “there’s no place like home” means. And many are making that happen with upgrades and remodeling. It has become the focal point of many people’s life. You don’t have to look at the analysts’ numbers to see what’s happening in the local market. Just check out the parking lots at Lowe’s or Home Depot. And many of the folks in those parking lots are do-it-yourselfers. A better test is calling a local firm that does upgrades and checking out when they can get to your project.
Reality TV programs on HGTV have become a mainstay for many. And countless books and articles on remodeling and home upgrades lay out what to do and what not to do.
The National Association of Realtors®(NAR) and the National Association of the Remodeling Industry Remodeling (NARI) Impact Report and NAR’s HouseLogic website are two of the most reliable resources.
The impact report can be found at https://www.nari.org/Remodelers-Contractors/Other-Resources/NAR-NARI-s-2022-Remodeling-Impact-Report
HouseLogic’s library of remodeling articles can be found at https://www.houselogic.com/remodel/
Local Realtors® are also a valuable information source for those who didn’t find a home 10 years old or younger but did find an older home with good bones that was priced right.
NETAR is the voice for real estate in Northeast Tennessee. It is the largest trade association in the Northeast Tennessee, Southwest Virginia region, representing over 1,600+ members and 100+ business partners involved in all aspects of the residential and commercial real estate industries. Weekly market reports and information for both consumers and members are available on the NETAR website at https://netar.us