Houston, Dallas, Austin, and San Antonio continue to see growth
The level of remodeling and replacement project activity nationally continues to improve in the third quarter of 2012, according to the latest release of the Residential Remodeling Index (RRI) by Hanley Wood, the parent company of REMODELING. The seasonally adjusted third quarter national composite of the RRI registered a score of 83.07, which was a 0.6% improvement over the revised second quarter result of 82.60.
The increase quarter-to-quarter was the third increase in a row after the industry experienced declines for the five straight quarters ending in 2011. The industry experienced the declines in activity as energy-related tax credits expired at the end of 2010 and both housing and the general economy wilted in 2011. As housing fundamentals are rapidly improving, remodeling and replacement activity is again on the rise and isforecast by Hanley Wood to improve for many quarters to come.
Estimated remodeling and replacement projects for 2011 came in at just over 10 million, or a decline of 4% over the 10.5 million estimated projects completed in 2010. The market peaked in 2007 at 12.7 million large, pro-worthy projects. Hanley Wood is now forecasting just over 10.1 million remodeling and replacement projects in 2012 and back up to 10.5 million projects in 2013.
“We had forecasted growth in remodeling and replacement activity in 2012 and the actual results are coming in close to expectations,” said Jonathan Smoke, the executive director of Hanley Wood Market Intelligence. “Housing fundamentals are actually improving more quickly than we are seeing remodeling activity pick up. As it becomes clearer to consumers that the improving housing environment is not a head fake, we expect to see activity pick up even more.”
According to the RRI data, growth will be widespread in 2013. The latest Hanley Wood report forecasts growth in all but 11 of the 366 metropolitan statistical areas tracked. Hanley Wood ranks the best markets for remodeling based on market health, level of activity, extent of recovery, and potential demand. The current top 10 markets are Houston, Dallas, Austin, San Antonio, Buffalo, Oklahoma City, Pittsburgh, Charlotte, Rochester, and Denver.