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The Remodeling MarketInternational Builders Show February 10 2012February 10, 2012
• Paul Emrath
• VP-Survey and Housing Policy Research
Outline
• NAHB Remodeling Market Index (RMI)
• NAHB remodeling forecast
• New NAHB estimates of remodeling by county
• Local economic impact of remodeling
• Volume of remodeling by size of project
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NAHB Remodeling Market Index (RMI)
• Quarterly survey of professional remodelers
• Have conditions gotten better or worse since last gquarter?
• Overall RMI + two major sub-indices:
– Current conditions
– Indicators of future activity
Remodeling Market Index (RMI): OverallSeasonally Adjusted
50
60
better/worse line
10
20
30
40
Inde
x
0
10
1st Qtr. 2001
1st Qtr. 2002
1st Qtr. 2003
1st Qtr. 2004
1st Qtr. 2005
1st Qtr. 2006
1st Qtr. 2007
1st Qtr. 2008
1st Qtr. 2009
1st Qtr. 2010
1st Qtr. 2011
Source: NAHB Economics and Housing Policy Group: Remodeling Market Index Survey
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RMI: Current Market Conditions Seasonally Adjusted
50
60
better/worse line
10
20
30
40
Inde
x
0
10
1st Qtr. 2001
1st Qtr. 2002
1st Qtr. 2003
1st Qtr. 2004
1st Qtr. 2005
1st Qtr. 2006
1st Qtr. 2007
1st Qtr. 2008
1st Qtr. 2009
1st Qtr. 2010
1st Qtr. 2011
Source: NAHB Economics and Housing Policy Group: Remodeling Market Index Survey
RMI: Future Indicators Seasonally Adjusted
50
60
better/worse line
10
20
30
40
Inde
x
0
10
1st Qtr. 2001
1st Qtr. 2002
1st Qtr. 2003
1st Qtr. 2004
1st Qtr. 2005
1st Qtr. 2006
1st Qtr. 2007
1st Qtr. 2008
1st Qtr. 2009
1st Qtr. 2010
1st Qtr. 2011
Source: NAHB Economics and Housing Policy Group: Remodeling Market Index Survey
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NAHB Remodeling Market Index (Seasonally Adjusted)
2010 2011Q4 Q1 Q2 Q3 Q4
OVERALL RMI 41.5 46.5 43.9 41.7 46.6
CURRENT MARKET CONDITIONS 43.3 46.1 44.8 43.0 48.4Major Additions And Alterations ($25,000+) 48.6 50.3 46.2 45.2 52.3Minor Additions And Alterations (< $25,000) 43.9 48.0 48.5 45.7 50.1Maintenance and Repair 37.0 39.5 38.4 37.1 42.3
INDICATORS OF FUTURE ACTIVITY 39.7 46.8 43.0 40.4 44.8Calls for Bids 47.2 53.1 49.8 45.4 50.7Amount of Work Committed for next 3 months 25.9 32.1 32.3 29.9 31.5
Backlog of Remodeling Jobs 42.6 49.7 45.7 43.0 46.8Appointments for Proposals 43.1 52.4 44.2 43.3 50.1
Source: NAHB Economics and Housing Policy Group: Remodeling Market Index Survey.
NAHB Forecasts
• GDP (Gross Domestic Product)– consumption, investment, govt, net exports – about $14.5 trillion$
• RFI (Residential Fixed Investment)– includes new construction and remodeling– normally about 5% of GDP (now, about 2.5%)
• Improvements to Owner-Occupied Housing– only remodeling input into RFI estimate– nearly equal to $ of new res. constructionnearly equal to $ of new res. construction– excludes maintenance and repairs– excludes improvements to rental properties
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Real GDP Growth
10%
15%
20% Q/Q Percent Change, SAAR
-5%
0%
5%
-15%
-10%
78 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Bureau of Economic Analysis, NAHB Economic and Housing Forecast.
700
800
900Billions 2005 $, SAAR
Residential Fixed Investment
200
300
400
500
600
0
100
89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13
Source: Bureau of Economic Analysis, NAHB Economic and Housing Forecast.
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Residential Remodeling:Owner-Occupied Improvements
140
160 Billions 2005 $, SAAR
60
80
100
120
2012 =113 078 +8 9%
-
20
40
93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13Source: U.S. Census Bureau, NAHB Economic and Housing Forecast.
2012 113,078 +8.9%2013 =125,958 +11.4%
• “Zone”-level data (areas w population~100K) from the American Housing Survey
& C f
Estimates of Remodeling by County:Statistical Model to Estimate Local Spending by Home Owners
– By HUD & the Census Bureau, available for select metros
• Remodeling spending sensitive to
– Number of home owners– Average value of the homes – Share built before1980– Married couple share
• Results can be applied to areas where data are available
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Estimates of Remodeling by County: Applying Results from the Model to Individual Counties
• Data available for each county from American Community Survey (ACS U S Census Bureau)Survey (ACS, U.S. Census Bureau)
• Need 5-years of ACS data—typical year spending
• First NAHB county estimates last year using 2005-2009 ACS data
• Updated using 2006-2010 data released just before Xmas 2011
Homeowners’ Spending on Remodeling in a Typical Year:County Estimates
# Owner-Occupied
Married Couple
Average Value of
Share Built
Typical-Year Remodeling
CountyOccupied Homes
Couple Share
Value of Homes Before
1980
County Total
($Million)Per Home
Average for All Counties 24,209 61.9% 168,052 59.3% 66 1,907 Median for All Counties 7,283 62.5% 139,963 59.2% 13 1,677 Autauga County, Alabama 15,285 62.7% 157,939 34.9% 26 1,683 Baldwin County, Alabama 53,309 65.6% 234,197 28.3% 118 2,207 Barbour County, Alabama 6,665 57.8% 129,414 47.7% 11 1,629 Bibb County, Alabama 6,170 61.0% 111,790 51.7% 9 1,430 Blount County, Alabama 16,897 64.6% 136,906 38.6% 25 1,486 Bullock County, Alabama 2,871 41.0% 135,791 57.6% 6 2,123 Butler County, Alabama 5,530 51.8% 100,811 55.2% 9 1,572 Calhoun County, Alabama 32,818 58.4% 125,958 53.7% 53 1,617 Chambers County, Alabama 9,764 55.9% 102,334 62.0% 15 1,522 Cherokee County, Alabama 8,802 68.7% 133,240 45.2% 12 1,393
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Homeowners’ Spending on Remodeling in a Typical Year:Counties with Highest Estimated Total Spending
# O M i d A Share Typical-Year R d li# Owner-
Occupied Homes
Married Couple Share
Average Value of Homes
Share Built
Before 1980
Remodeling County Total
($Million)Per Home
1 Los Angeles County, California 1,552,091 59.7% 575,083 77.9% 8,363 5,388 2 Cook County, Illinois 1,169,991 55.2% 326,935 79.1% 4,055 3,466 3 Orange County, California 599,032 64.0% 639,702 64.3% 3,445 5,751 4 San Diego County, California 593,945 61.7% 543,286 55.9% 2,953 4,971 5 Maricopa County, Arizona 916,515 59.9% 305,165 34.4% 2,708 2,955 6 Santa Clara County, California 353,399 65.6% 736,029 70.9% 2,310 6,536 7 King County, Washington 468,539 60.6% 478,379 58.8% 2,099 4,480 g y g8 Nassau County, New York 363,366 68.5% 561,722 91.7% 1,868 5,142 9 Suffolk County, New York 403,093 67.0% 482,693 77.5% 1,797 4,458
10 Queens County, New York 352,110 56.7% 497,100 92.6% 1,723 4,894
Homeowners’ Spending on Remodeling in a Typical Year:Counties with Most Home Owners
# O M i d A Share Typical-Year R d li# Owner-
Occupied Homes
Married Couple Share
Average Value of Homes
Share Built
Before 1980
Remodeling County Total
($Million)Per Home
1 Los Angeles County, California 1,552,091 59.7% 575,083 77.9% 8,363 5,388 2 Cook County, Illinois 1,169,991 55.2% 326,935 79.1% 4,055 3,466 3 Maricopa County, Arizona 916,515 59.9% 305,165 34.4% 2,708 2,955 4 Harris County, Texas 793,400 62.5% 182,516 48.8% 1,555 1,960 5 Orange County, California 599,032 64.0% 639,702 64.3% 3,445 5,751 6 San Diego County, California 593,945 61.7% 543,286 55.9% 2,953 4,971 7 Miami-Dade County, Florida 480,532 55.1% 338,102 59.0% 1,663 3,460 y8 King County, Washington 468,539 60.6% 478,379 58.8% 2,099 4,480 9 Riverside County, California 467,086 63.7% 362,799 31.8% 1,553 3,325
10 Wayne County, Michigan 464,603 50.1% 151,103 84.4% 1,008 2,171
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Homeowners’ Spending on Remodeling in a Typical Year:Counties with Highest Estimated Spending Per Home
# O M i d A Share Typical-Year R d li# Owner-
Occupied Homes
Married Couple Share
Average Value of Homes
Share Built
Before 1980
Remodeling County Total
($Million)Per Home
1 Nantucket County, Massachusetts 2,657 58.1% 979,540 33.5% 23 8,520 2 New York County, New York 167,031 42.2% 830,881 86.5% 1,326 7,939 3 Marin County, California 65,720 59.4% 866,482 77.2% 511 7,782 4 San Francisco County, California 126,028 50.3% 811,538 84.9% 956 7,582 5 San Mateo County, California 156,149 63.1% 807,389 82.0% 1,130 7,235 6 Teton County, Wyoming 4,542 64.0% 777,138 39.7% 31 6,754 7 Pitkin County, Colorado 4,635 55.7% 733,599 46.8% 31 6,626 y8 Dukes County, Massachusetts 4,485 57.8% 737,681 47.1% 30 6,613 9 Santa Clara County, California 353,399 65.6% 736,029 70.9% 2,310 6,536
10 Santa Cruz County, California 55,878 60.3% 669,461 69.4% 341 6,106
Homeowners’ Spending on Remodeling in a Typical Year:Counties with Highest Value Homes
# O M i d A Share Typical-Year R d li# Owner-
Occupied Homes
Married Couple Share
Average Value of Homes
Share Built
Before 1980
Remodeling County Total
($Million)Per Home
1 Nantucket County, Massachusetts 2,657 58.1% 979,540 33.5% 23 8,520 2 Marin County, California 65,720 59.4% 866,482 77.2% 511 7,782 3 New York County, New York 167,031 42.2% 830,881 86.5% 1,326 7,939 4 San Francisco County, California 126,028 50.3% 811,538 84.9% 956 7,582 5 San Mateo County, California 156,149 63.1% 807,389 82.0% 1,130 7,235 6 Teton County, Wyoming 4,542 64.0% 777,138 39.7% 31 6,754 7 Dukes County, Massachusetts 4,485 57.8% 737,681 47.1% 30 6,613 y8 Santa Clara County, California 353,399 65.6% 736,029 70.9% 2,310 6,536 9 Pitkin County, Colorado 4,635 55.7% 733,599 46.8% 31 6,626
10 Santa Cruz County, California 55,878 60.3% 669,461 69.4% 341 6,106
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New Estimates of Remodeling Spending by County
Available online to all members of NAHB Remodelers
For more information contact
Therese CrahanExecutive Director, NAHB Remodelors
1-800-368-5242 [email protected]
Local Economic Impact of Remodeling
• Local Income, jobs, taxes generated per $10M spending on remodeling
• Results for a typical metro area available online
• Can be used to publicize benefits of remodeling business to the community
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The Local Impact of Home Building in a Typical Metro Area: Income, Jobs, and Taxes Generated
Executive SummaryThe estimated one-year local impacts of $10 million spentThe estimated one-year local impacts of $10 million spent on remodeling in a typical metro area include
• $6.9 million in local income,• $577,000 in taxes and other revenue for local
governments, and• 78 local jobs.
Report shows more detail, including jobs in each industry and local taxes by type
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NAHB Remodeling Market Index (RMI)
Most quarters survey includes a set of “special”Most quarters, survey includes a set of special questions—in 2011 Q2, on volume of remodeling by size of project
Share of Business (in $ volume) by Size of Project—NAHB Remodelers
18%
21%
10%9%
12%
15% 15%
Source: Remodelers Market Index Special Questions, 2nd Qtr. 2011, NAHB Economics and Housing Policy Group.
Under $2.5K $2.5K to $5K $5K to $10K $10K to $25K $25K to $50K $50K to $100K $100K +
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Share of Business by Size of Project—NAHB Remodelers vs. Total Market
19%
24%
21%Total MarketNAHB Remodelers
15% 14%
19%
13%
9%7%
10%9%
12%
15%
18%
15%
Source: Remodelers Market Index Special Questions, 2nd Qtr. 2011, NAHB Economics and Housing Policy Group;Tabulations of data from the 2009 American Housing Survey, U.S. Census Bureau and HUD.
Under $2.5K $2.5K to $5K $5K to $10K $10K to $25K $25K to $50K $50K to $100K $100K +
Characteristics of NAHB Remodelers:Volume of Business Activity in 2010
49%Under $500,000
1%
22%
26%
$5 million to $9,999,999
$1 million to $4,999,999
$500,000 to $999,999
Source: NAHB 2010 Builder Member Census
1%$10 million or over*
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Characteristics of NAHB Remodelers:
• 95 percent have employees on the payroll
– Average: 3.6 construction employees, g p y ,2.1 non-construction
• Over 60 percent also build some new homes
– Average: 2 single-family starts in 2010
Source: NAHB 2010 Builder Member Census
If NAHB Remodelers capture most business
Question:
If NAHB Remodelers capture most business in the $100,000+ range, how much business in other job size categories are they missing?
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Total Remodeling in the U.S. by Size of Project—in $Billion
$5.8 B $21.5 BUnder $2.5K
$5.2 B
$7.0 B
$8.7 B
$10.5 B
$21.4 B
$27.8 B
$35.2 B
$12.9 B
$2.5K to $5K
$5K to $10K
$10K to $25K
$25K to $50K
$ 0 $100 C t d b NAHB
Source: Remodelers Market Index Special Questions, 2nd Qtr. 2011, NAHB Economics and Housing Policy Group;Tabulations of data from the 2009 American Housing Survey, U.S. Census Bureau and HUD.
$8.7 B
$12.2 B
$8.2 B
$0.7 B
$50K to $100K
$100K +
Captured by NAHB Remodeler-type BusinessesOther
This presentation is available as a handout on the internet at www.buildersshow.com/education
Contact Paul Emrath
VP-Survey and Housing Policy ResearchNAHB Economics and Housing Policy Group
1-800-368-5242 [email protected]
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Thank You