Remodeling hot spots

Compiled by Jenni Chase. Source: Joint Center for Housing Studies of Harvard University
June 5, 2011

Source: Reprinted from “A New Decade of Growth for Remodeling” with permission from the Joint Center for Housing Studies of Harvard University. All rights reserved. To download a full copy of the report, visit

Editor's note: Although JCHS expectations are that remodeling spending will continue to grow, the industry might not see any significant growth until 2012. At press time, JCHS was predicting home improvement spending would be up just 0.2 percent in 2011, pointing to the still-stalled housing recovery and overall concern regarding the pace of economic growth as contributing factors.

The U.S. home improvement industry is emerging from its worst downturn since the government began tracking spending in the early 1960s, according to a 2011 study from the Joint Center for Housing Studies of Harvard University. After remodeling spending peaked in 2007, it fell 12 percent between 2007 and 2009. Homeowner spending on discretionary projects like kitchen and bath remodels fell 3 percent, according to "A New Decade of Growth for Remodeling," the sixth report in the Improving America's Housing series published by the Remodeling Futures Program at the Joint Center.

The good news, however, is the worst appears to be behind us. As the economy recovers and the broader housing market stabilizes, spending on homeowner improvements is expected to grow at a 3.5 percent annual rate over the coming years, JCHS analysts predict.

Still, the remodeling market of the coming decade will be different than its predecessor, relying less on upper-end discretionary projects to drive growth and more on smaller projects like replacements and system upgrades.

Hot spots

Based on local market conditions in 2009-10, several metropolitan areas appear well positioned for an upturn in remodeling activity, according to the study. Among them: San Francisco, Los Angeles, San Diego, San Jose, Boston, New York and Philadelphia (see Fig. 1). These markets might be poised for faster recoveries because they have older housing stocks, higher incomes and home values, and a larger share of upscale remodeling expenditures, the study says.

According to the report, homeowners in top remodeling markets typically devote a larger share of their spending to major projects like kitchen and bath remodels, the bread and butter for many glass retailers.

In contrast, less favorable market conditions point to slower recovery in overbuilt areas of Florida, as well as Las Vegas and Phoenix, according to the study.

To download a free copy of the full report, "A New Decade of Growth for Remodeling," visit