Abstract:
n late July, the U.S. Census Bureau confirmed what many remodelers had already suspected—that the remodeling market is much larger than previous statistical research suggested.
Publication Date:
Sat, 2000-09-30 19:00
Article Image:
In late July, the U.S. Census Bureau confirmed what many remodelers had already suspected - that the remodeling market is much larger than previous statistical research suggested. As a result of cooperative research between the Census Bureau, NAHB and Harvard University’s Joint Center for Housing Studies, substantial upward revisions have been made to census statistics dating back to 1984 in the C-50 data series.
According to the revised figures, remodeling expenditures totaled $142.9 billion in 1999, a 16-percent increase above the original $120 billion estimate. Improvements accounted for 70 percent of the total remodeling expenditures, with the remainder going toward maintenance and repair. For the fourth quarter of 1999, total expenditures for remodeling reached a seasonally adjusted annual rate of $165.2 billion, representing a record level of remodeling activity. Previously, the record stood at $151.7 billion, estimated in the second quarter of 1998.
Mike Carden, CGR and CEO of MUI Corp. in Birmingham, Ala., notes that these numbers merely reflect what most industry professionals already suspected. "They’re now reflecting the industry more accurately," he says. "I’m ecstatic over this. This is the biggest recognition of our industry since the beginning of time."
Carden notes that the new statistics paint a more accurate picture of the remodeling market’s significance. "When you look at the advertising market, it’s about $ 212 billion-per-year industry, and that includes all advertising you see. With remodeling at $165 billion, it puts us up there as a very fast growing industry," he says.
The U.S. Commerce Department’s C-50 survey is only one of two national surveys tracking remodeling, and is the only survey that tracks improvements and repairs made to rental, vacant and seasonal properties. These units count for about a third of the nation’s housing, with $43.6 billion spent on remodeling them in 1999. Carden estimates that by 2005, the more accurate statistics will show that the remodeling industry will overtake new construction.
Disagreement about the size of the remodeling market is not likely to be put to rest by the Census Bureau’s modifications, however. Even with the recent adjustments, HUD’s surveys still estimate that homeowners are spending more money on remodeling than reflected by the Census numbers. The latest AHS survey from HUD estimates that $242 billion was spent on residential improvements in 1996 and 1997. The Census Bureau’s numbers for the same years only total $182.5 billion, a difference of nearly $60 billion.
Carden believes that further investigation into remodeling statistics will result from Harvard University’s interest in the remodeling market. "It took Harvard to make the government stand up and pay attention," says Carden. "But now that the remodeling market is carrying enough national volume and national attention, the government will want to go back and adjust their numbers."
