The era of the new house is over. As the recession continues to worsen, economic realities are sinking in. Chief among them is a new perspective on wealth, and what's really necessary to live comfortably. Middle class families may rethink indulging in an everyday latte or casually buying cashmere sweaters for infants. And they may also, no doubt, think twice about their dream home.
New McMansions dotting the suburban landscape are sitting empty. Not only is their initial price tag daunting, but so is everything that comes with a monster home: big heating and cooling bills, the cost of commuting to an urban job, and the knowledge that oil prices probably won't stay low for long. In turn, the older home and remodeling market are prime to see significant gains.
Turning to Remodeling
In 2007, 38 percent of construction was remodeling, according to the National Association of Home Builders. That number is expected to skyrocket over the next decade and easily surpass that of new construction. Today, there are 128 million homes in the U.S., with an average age of 33 years. The market for remodeling is ripe. The $216 billion remodeling industry expects to grow to $322.3 billion by 2016, according to the NAHB. "There is no place to go but up," Therese Crahan, NAHB's executive director, recently said. "Homes need to be maintained."
Some 70 percent of the industry centers around basic needs such as replacing siding and upgrading heating and air conditioning, Crahan said. High-end expansion only makes up 2 percent of the market. For old house remodelers, this represents both good and bad news.
The bad news is that you may have more competition than you've had in awhile. Out-of-work new home builders may be angling in on your territory. Crahan suggests remodelers consider expanding their horizons. One possibility is to become certified aging-in-place specialists to help the some 79 percent of people older than 45, who hope to stay in their own homes as long as possible. Since 2001, 3,000 remodelers have graduated from the NAHB program.
The good news, of course, is that you've got a leg up in the game.
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