With the real estate market experiencing a decline in many states, more and more homeowners are turning to remodeling and renovation instead of moving. Adding on to a home or renovating an old space can be a much cheaper alternative than moving. However, with home improvement demand on the rise, a shortage of contractors has become apparent.
Contractors for home remodeling and renovation are getting swamped with work across the country, with some cities reporting that their contractors have a backlist of contracts to fill. This means that getting a home remodel or addition can be almost impossible in some locations.
The demand for these services is fueled by a robust economy and rising home values. This allows homeowners to fund improvements, which many are doing. Americans are expected to spend over $300 billion on home remodeling this year. The most popular renovation project for the past two decades has been a finished basement, says the National Association of Home Builders. Though, in the current market, it will be hard to get in the door to have one done.
“I’ve been doing this since 1981 and have never seen it this busy,” said Todd Schmidt, owner of the Grove City remodeling firm Renovations Unlimited.
And while this is a great thing for contractors, it means that some homeowners are stuck waiting. Harvard University’s Joint Center for Housing Studies forecasts that spending will continue to rise another 6% in the next 12 months. This is matched by estimates by Metrostudy, a private company that tracks the industry. The company reports a record level of remodeling activity.
“The remodeling market continues to benefit from a stronger housing market and, in particular, solid gains in house prices, which are encouraging owners to make larger investments in their homes,” said Chris Herbert, managing director of Harvard’s housing center.
In areas like central Ohio, remodeling activity is even stronger than other states. There has been a 22% rise in requests for remodeling quotes, especially in the Columbus area. However, while there has been a growing interest in quotes there has been a decline in building and remodeling permits in the last 12 months, a result of the backlog.
According to the Columbus Building and Zoning Department’s data, this information runs from August 31 of 2016 to August 31 of 2017. In addition to this decline, there has been an increase in the value of projects. The average project value rose 3% from the year before.
This reflects the current remodeling climate. Homeowners spending more, but less overall projects able to be completed. Hopefully, both the real estate and the remodeling markets can stabilize in the coming months.