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2017-05-10 / Featured / Real Estate

Boomers fueling uptick in remodeling

BY RICH GRISET STAFF WRITER


People are concerned about having the ground-floor master bedroom [as an] option for aging parents.” People are concerned about having the ground-floor master bedroom [as an] option for aging parents.” With baby boomers eyeing a future where they’ll age in place and millennials renovating older homes, the Harvard Joint Center for Housing Studies is anticipating healthy growth for the U.S. home improvement market through 2025.

The center’s recently released report “Demographic Change and the Remodeling Outlook” also states that boomers will continue to drive the remodeling market, and that the amount spent on improvements and repairs by homeowners and renters reached an all-time high of $340 billion in 2015, eclipsing the previous peak in 2007.

Kermit Baker, director of the Remodeling Futures Program at the center, says that the study was conducted to see how demographics will shape the future of the country’s remodeling market. For the past few decades, boomers have been the key drivers of the housing and home improvement markets. Baker says that trend will continue for the foreseeable future.

“There was some thought that that [trend] was going to wane a little bit,” Baker says. “It looks like we’re not quite there yet. The baby boomer generation is still so large, and by and large wants to remain in their current home.”

Baby boomers have been refitting their homes in order to care for aging parents, and in anticipation of a future when they themselves aren’t as mobile. Dan Bawden, 2017 chairman of the National Association of Home Builders Remodelers organization, agrees. “There is an ever-increasing demand for aging-in-place work,” Bawden says. He adds that boomers often make modifications to their own homes after seeing their parents age. “They often take a look around their own home and go, ‘If I broke my leg in a car wreck, could I get into my own house? Could I get into the bathroom?’”

Bawden’s company, Legal Eagle Contractors Co., specializes in remodeling homes for the elderly in the Houston area. As aging-in-place home remodeling is more of a necessity (instead of, say, remodeling a kitchen for younger homeowners), Bawden says his company managed better than most during the economic downturn a few years ago. He adds that he’s seen many more intergenerational projects – such as adding in-law suites – to facilitate having people’s aging parents move back in with them.

Kathy Corbet, owner of Willow Lawnbased Kathy Corbet Interiors, says she’s seen this trend take place locally.

“People are concerned about having the ground-floor master bedroom [as an] option for aging parents,” says Corbet, a member of the National Association of the Remodeling Industry Central Virginia.

Now that the economy has come back, Corbet says boomers are finally getting around to projects they had been putting off, such as remodeling kitchens and master bathrooms. She says many boomers and millennials are trying to incorporate amenities that they’ve seen at restaurants and hotels into their homes, like adding an independent coffee bar in the kitchen.

An increase in the country’s older housing inventory, as much as a million homes a year, is also expected as aging baby boomers move into retirement homes. Meanwhile, as homes appreciate and regain value lost due to the 2007-08 recession, homeowners can borrow against their equity to undertake larger projects.

Bawden says boomers are still trying to “keep up with the Joneses,” adding features to their homes like outdoor kitchens and living areas, and redoing indoor kitchens. Baker says energy-efficient features are continuing to gain popularity, and that home automation – electronic systems that control everything from home temperature to appliances – has become popular in the past couple years.

“People are just much more used to their smartphone as a way to manage their life,” Baker explains.

The Harvard report also states that millennials are poised to enter the remodeling market, but aren’t quite there yet. Given the cost of land and other factors, new starter homes are expensive to build and are often located in the outer suburbs and exurbs – places millennials don’t tend to gravitate toward. For both of these reasons, it’s expected that millennials will buy more affordable, older homes and remodel them.

Still, Baker says millennials have not entered the remodeling market as much as had been anticipated.

“They have been so late in forming households, having children, buying homes,” Baker says. “We’re not going to see a ton of growth from younger households quite yet.”

Whenever they do start buying homes, Bawden says there’s plenty of inventory in need of his services.

“There’s a lot of housing stock that needs to be remodeled, and a lot of cities have older neighborhoods that are becoming gentrified,” Bawden says. ¦

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