News, Trends, Community - May

Harvard Report

Significant Remodeling Likely As Boomers Age

The turnover of housing units, especially as members of the Baby Boomer generation face retirement, has considerable implications for home-improvement spending as new occupants update or reconfigure homes to fit their needs, according to the Cambridge, Mass.-based Joint Center for Housing Studies (JCHS) at Harvard University.

Because homes sold by older owners are older and typically more affordable, a majority are purchased by much younger buyers. The sale of older homes to younger households generates a particularly high level of home-improvement spending. Buyers under age 35 who purchased from a seller older than 55 spent more than 60 percent more on average in the two years after the sale than those purchasing homes from sellers under age 55, according to an article in the Winter 2011 JCHS newsletter.

Yet the housing turnover behavior of Baby Boomers will possibly differ from the recent experience of older sellers in previous decades. In particular, the mobility of Baby Boomers has been trending downward during the past two decades, suggesting more Boomers may choose to stay in their homes and age in place. For more information, visit Jchs.Harvard.edu.

Lead RRP Rule

NAHB Files Brief in Opt-out Suit

The Washington, D.C.-based National Association of Home Builders has filed an opening brief explaining why it is suing the U.S. Environmental Protection Agency for eliminating a provision in its lead rule that allowed homeowners to opt out of some of the rule’s renovation requirements.

The opening brief filed on March 30 claims EPA:

  • Violated the Administrative Procedure Act by failing to offer reasoned explanations for the removal of the opt-out provision.
  • Failed to point to any new data that was not available at the time it issued the 2008 RRP rule.
  • Grossly underestimated the costs of compliance.
  • Provided cursory explanations for why it changed its position on the opt-out provision.
  • Failed to comply with the Regulatory Flexibility Act, which affords protections to small businesses.

To read a Q&A with Amy Chai, NAHB’s senior counsel, and Matt Watkins, NAHB’s environmental policy analyst, about the brief, visit QualifiedRemodeler.com/RRP.

Mortgages

Foreclosures Down in First Quarter

Irvine, Calif.-based RealtyTrac’s U.S. Foreclosure Market Report for the first quarter of 2011 shows foreclosure filings—default notices, scheduled auctions and bank repossessions—were reported on 681,153 U.S. properties in the first quarter, a 15 percent decrease from the previous quarter and a 27 percent decrease from the first quarter of 2010. Foreclosure filings were reported on 239,795 U.S. properties in March, a 7 percent increase from the previous month but still down 35 percent from March 2010, when 367,056 homeowners received a foreclosure notice—the highest monthly total in the history of the RealtyTrac monthly report since its inception in January 2005.

Associations

NKBA CEO Sciolaro Steps Down

The Washington, D.C.-based National Kitchen & Bath Association announced Don Sciolaro, chief executive officer, left his post with the association just prior to the association’s annual Kitchen and Bath Industry Show in April. Bill Darcy, director of marketing, has been promoted to executive vice president. Darcy joined NKBA as the manager of marketing partnerships and subsequently was promoted to manager of business development, senior manager of marketing and director of marketing. NKBA has launched a formal search for a new CEO.

Home Price Index

Prices Decline but Show Signs of Stability

Santa Ana, Calif.-based CoreLogic’s February Home Price Index showed home prices in the U.S. declined for the seventh month in a row. National home prices, including distressed sales, declined by 6.7 percent in February 2011 compared to February 2010 after declining by 5.5 percent in January 2011 compared to January 2010. Excluding distressed sales, year-over-year prices declined by 0.1 percent in February 2011 compared to February 2010 and by 1.4 percent in January 2011 compared to January 2010.

“When you remove distressed properties from the equation, we’re seeing a significantly reduced pace of depreciation and greater stability in many markets,” says Mark Fleming, chief economist with CoreLogic. “Price declines are increasingly isolated to the distressed segment of the market, mostly in the form of REO sales, as the stock of foreclosures is slowly cleared.”

43 percent of all consumer respondents say they know what smart-grid technology is though the number was greater for respondents in the upper-middle (63 percent) and high-income (57 percent) segments.
Source: Survey conducted for Whirlpool Corp. and Habitat for Humanity International by the NAHB Research Center

Community Service

Maryland Remodeler Goes to the Dogs

Baltimore-based Atlantic Remodeling Corp. has been named presenting sponsor of the 16th annual “March for the Animals.” The 1 1/2-mile walk-a-thon is the major charity event conducted by volunteers to raise funds for the Maryland Society for the Prevention of Cruelty to Animals (SPCA). This marks the second year Atlantic Remodeling has served as the lead sponsor. Last year’s event raised $364,000 to benefit the work of the Maryland SPCA. Atlantic Remodeling also has launched a golf tournament, banquet and auction—the Atlantic Remodeling Play-A-Round for Pets—to raise funds for the SPCA.

New Construction

Housing Starts Up 7.2 Percent

Nationwide housing starts rose 7.2 percent to a seasonally adjusted annual rate of 549,000 units in March, the Washington, D.C.-based U.S. Commerce Department reported. Coming on the heels of declines in February, this gain was represented in the single- and multifamily sectors and was mirrored by substantial improvements in building permit issuance for the same period.

Aging in Place

89% of people 50+ wish to remain in their own homes indefinitely. Source: AARP
68% of remodelers already perform aging-in-place remodeling. Source: NAHB
More than half of all 55+ households rate their current home a 9 or 10 out of 10. Source: American Housing Survey

Appliances

Electrolux Selects Memphis for Plant

Stockholm, Sweden-based Electrolux has selected Memphis, Tenn., as the location of its new North American Cooking Products Manufacturing Center. The plant will build the company’s Electrolux, Electrolux ICON and Frigidaire built-in and specialty-cooking products. These include drop-in/slide-in ranges, wall ovens, specialty free-standing ranges and cooktops. The new facility will assume the manufacturing currently located in L’Assomption, Quebec, Canada.

Remodeling Index

Index Shows February Gain

The Austin, Texas-based BuildFax Remodeling Index report indicated in February that residential remodeling activity registered the 16th straight month of year-over-year gains, demonstrating that many Americans are turning to remodeling their current homes. The index rose 20 percent year-over-year to 95.1, the highest February number in the index since 2006. All regions posted year-over-year gains though the Northeast continues to lag behind other regions.

Trends

Architects’ Interest in Kitchen and Bathroom Remodeling Rising

Residential architects are reporting that business conditions are stabilizing and there is a healthy demand for remodeling and renovation projects. The input comes from the Washington, D.C.-based American Institute of Architects Home Design Trends Survey for the fourth quarter of 2010, which focused specifically on kitchens and bathrooms. “We are not seeing the same level of demand for larger and additional kitchens and bathrooms as we saw during the peak of the housing market, but there has been a shift away from downsizing those rooms that has taken place the last two years,” says AIA Chief Economist Kermit Baker, Ph.D., Hon. AIA. “Key considerations are the amount of pantry space, dedicated recycling centers, and the integration with family space allowing for easier child care and home entertaining.”

Loading