Home Renovation Pros Paint a Bright Picture for the Rest of 2018

The Houzz Renovation Barometer for fourth quarter 2018 shows that wait times to work with a building firm have dropped

New data just out on the residential remodeling industry paints a rosy picture for firms in the industry. Firms expect business activity to rise during the final three months of 2018, the data shows. And homeowners may get some relief from long wait times to start their projects, as the average wait time for construction sector firms dropped to 4½ weeks from 6½ weeks during the previous three months.

“Home renovation professionals are clearly very upbeat about the year end, despite a number of challenges facing the industry today,” says Nino Sitchinava, principal economist at Houzz.

The data come from the Q4 2018 Houzz Renovation Barometer, which tracks residential renovation market expectations, project wait times and recent business activity. (Market expectations and business activity have been smoothed out to account for predictable seasonal fluctuations, while project wait times have not.) The Barometer is based on a quarterly survey of residential remodeling businesses with a profile on Houzz and garnered 1,750 responses. Read on to gain insights from what they said.

Buying a Home is Cheaper than Renting

Home Prices Are Up 6.49% Across the Country [INFOGRAPHIC]

NWMLS Monthly Market Snapshot

Real Estate Statistics for April 2018 Infographic

Buyer & Seller Markets

House Rentals Outpace Apartment Boom

The multifamily sector has seen a frenzy of apartment construction over the last decade, but it’s single-family homes that were the fastest growing type of rental between 2007 and 2016, according to a new study by RentCafe. Over the last decade, single-family rentals rose by 31 percent, while the multifamily sector grew by 14 percent. In net gain, the growth makes up 3.6 million units versus 3.2 million units added, respectively.

Existing Home Sales Report

For years, inventory levels have been sinking, and prices have been growing, making the home buying process increasingly complex and sometimes discouraging. But after two consecutive months of declining sales, existing-home sales made a comeback in February, rising 3.0 percent, according to the National Association of Realtors (NAR). Sales are now 1.1 percent higher than February of last year. #GoodNews

Although home sales in the Midwest and Northeast saw a dip in this period, the South and West regions skyrocketed, boosting the national numbers.

Dr. Lawrence Yun, NAR’s Chief Economist noted that “The very healthy U.S. economy and labor market are creating a sizeable interest in buying a home in early 2018. However, even as seasonal inventory gains helped boost sales last month, home prices – especially in the West – shot up considerably. Affordability continues to be a pressing issue because new and existing housing supply is still severely subpar.”

Added Yun, “The unseasonably cold weather to start the year muted pending sales in the Northeast and Midwest in January and ultimately led to their sales retreat last month. Looking ahead, several markets in the Northeast will likely see even more temporary disruptions from the large winter storms that have occurred in March.”

Click to enlarge.

In February, the median home price rose to $241,700, a 5.9 percent increase from February 2017, and the 72nd straight month of annual gains. The average days on market fell to 37, down from 41 in January, and 45 last February. That’s what we call a competitive market.

NAR President Elizabeth Mendenhall comments on the difficulty first-time buyers are seeing in this competitive market. “Realtors® in several markets note that entry-level homes for first-timers are hard to come by, which is contributing to their underperforming share of overall sales to start the year. Prospective buyers should start conversations with a Realtor® now on what they want in a new home. Even with the expected uptick in new listings in coming months, buyers in most markets will likely have to act fast on any available listing that checks all their boxes.”

Regional performance varied, with sales in the West outperforming all other regions. While sales fell in the Northeast by 12.3 percent, and dropped 2.4 percent in the Midwest, they skyrocketed 11.4 percent in the West, and 6.6 percent in the South.

2017 Housing Market in Review

A video infographic with statistical information from the 2017 housing market.