what your neighbors are doing

A pool under construction in Washington, DC.

Pat Pugliese | CNBC

Justin Sullivan’s backyard is buzzing with activity as workers hammer out his new patio and jackhammers pound through the basement.

The concrete for the new pool has already been poured. The Sullivans had planned a renovation before the pandemic, but then it suddenly turned into a much bigger project.

“The pool, the home gym, the sauna – these are things that when you can’t go out make your house a comfortable place where you can live bunker-style and still be active, feel good and still enjoy.” can,” Sullivan said. “The kids will have spaces to make sure they can work from home and if it gets really hot in the summer they’ll have somewhere to cool off.”

The Sullivans are far from alone in their desire to create a retreat, even if that retreat is in their own basement. Houzz, an online home remodeling platform, reported a 58% annual increase in home improvement project leads in June.

Those who work outdoors saw the biggest increase in demand, with searches for pool and spa professionals three times higher than a year ago. Not far behind, landscaping contractors, decking and decking professionals saw more than double the demand.

Pool demand is so strong that even Wall Street investors are taking notice. Poolcorp, an international distributor of pool accessories, replacement parts and products for outdoor living, hit an all-time intraday high this week and is up over 54% year-to-date. The stock is facing its best year since 2003.

Much like real estate agents, remodeling professionals are now adapting to a new world of social and professional distancing.

Jason Sullivan’s renovated home in Washington DC

Pat Pugliese | CNBC

“Over the past year, we’ve made many significant additions and improvements to how our platform helps homeowners find and connect with the right professional for their project – the ability to schedule video meetings with professionals directly from Houzz Pro is just an example – and we’re really seeing the impact of those investments in the number and quality of connections we make,” said Liza Hausman, vice president of industry marketing at Houzz.

Kitchens and bathrooms have always been popular remodeling choices, but even these saw a 40% year-over-year increase in demand in June. More and more people cook and eat at home, kitchens are even more the center of family life.

Residential home extensions and additions increased by 52%, and security and privacy also saw much greater demand, with interest in fencing installation and repair increasing by 166%.

Homeowners are likely to get an added incentive from the record-high amount of home equity they now have. Property prices continue to rise despite the economic downturn as demand for housing soars.

Just over 15 million residential properties were considered equity-rich in the second quarter, meaning mortgages on those properties accounted for 50% or less of home value, according to ATTOM Data Solutions. That’s 27.5% of all mortgaged homes in the US, up from 26.5% in the first quarter.

“Homeowners across the United States experienced a widespread increase in their equity in the second quarter of this year, another sign that the real estate market is fighting back the coronavirus pandemic,” said Todd Teta, chief product officer at ATTOM. “More and more property owners got into equity-rich territory and escaped the serious underwater trail, pushing more money into the average household.”

Justin Sullivan, who is also a home builder, says he sees more and more people using their home equity to fund these projects.

“We’re also hearing that money that people save because they don’t go to restaurants, don’t eat out, don’t go on vacations, those things are saved and they choose to put that value back into their homes as an investment.” ‘ Sullivan said. “They have more confidence in their homes than investments.”

Home accommodating clearly impacted demand, as more than three-quarters of all U.S. homeowners said they’ve undertaken some type of home improvement project during the pandemic, according to a recent survey by another remodeling platform, Porch.com.

More than three-quarters also said they would be embarking on a new project in the next 12 months. The biggest motivator was “finally having time,” according to the report. The next step was to increase the value of the house and finally to “make the home more comfortable”.

While homeowners may continue to do more projects in the fall, some experts are predicting spending will fall. Harvard’s Joint Center for Housing forecasts a 0.4% annual decline in home renovation and repair spending through the second quarter of 2021.

“The remodeling market buoyed in the early months of the pandemic as owners spent significant amounts of time at home and recognized the need to update or reconfigure indoor and outdoor spaces for work, school, play, exercise and more,” said Chris Herbert , executive director of the Joint Center for Housing Studies.

“However, the sharp drop in home sales and project permitting activity this spring, along with record unemployment, suggest many homeowners are likely to scale back plans for major renovations this year and next.”


Leave a Comment