Report: remodeling spending bouncing back in 2014, but not in ABQ

Posted: 9:37 pm

Copyright 2013 Albuquerque Journal

Spending on home remodels is expected to return to pre-recession levels nationwide by mid-2014, according to an index put out by Harvard University, but indications are it wont happen in Albuquerque.

The pace of remodel spending across the country is forecast to increase by double-digit percentages from the third quarter of this year through the second quarter of 2014, when it will peak at $148.9 billion, according to the Leading Indicator of Remodeling Activity by Harvards Joint Center for Housing Studies.

The $148.9 billion in spending in mid-2014 will eclipse the most recent high of $146.2 billion set in mid-2007. The nationwide pace of remodeling is forecast to slow down in the latter half of 2014.

The soft patch that homebuilding has seen in recent months, coupled with rising financing costs, is expected to be reflected as slower growth in home-improvement spending beginning around the middle of next year, said Eric S. Belsky, managing director of the center, in a prepared statement.

FOLKMAN: City has a unique housing market

At the national level, remodeling activity has tended to track with the pace of homebuilding, said Jim Folkman of the HBA, the homebuilders association in the metro. Both tend to reflect housing demand.

That is much less true in the Albuquerque market, however, he said. There really doesnt appear to be a one-to-one relationship between those two different construction activities in our metropolitan area.

For example, homebuilding hit a 30-year low in the metro in 2011 when building permits were issued for 1,192 new homes, he said. In stark contrast, 2011 was a robust year for home remodels, he noted.

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Report: remodeling spending bouncing back in 2014, but not in ABQ