According to “The Remodeling Market in Transition,” a new report from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, green remodeling projects and other planned home upgrades will continue at a pace ahead of new construction and may serve as growth prospects for the economy—and the lighting industry—in the days ahead.
“The upper-end remodeling projects that really drove the last four or five years have switched to replacements, upgrades and energy-efficient upgrades,” says Kermit Baker, Ph.D., a Senior Research Fellow at Harvard University’s Joint Center for Housing Studies. When asked how lighting might fit in, Baker noted that specific product-line details were not cited in the data. Nevertheless, “it may well be,” he says, “that when homeowners improve their systems they will also replace some lighting.”
As with the new construction, remodeling is experiencing a downturn. The data, however, suggest that remodeling expenditures typically decline less drastically than residential construction spending does in downturns (see table). The more tempered peak-to-trough swings of remodeling, when compared to residential construction, hints that remodeling may lead the way once the market recovers.
“The Remodeling Market in Transition” indicates that a rising number of residential properties in or at risk of foreclosure is driving down remodeling activity. But the data suggest this is a near-term problem. When the housing market returns, foreclosed properties will be ripe for remodeling improvements and repair. Banks and new owners will make use of the Housing and Economic recovery Act of 2008, which allocated some $4 billion for redevelopment of abandoned and foreclosed properties.
“Homeowners can improve energy efficiency by replacing appliances and lighting systems, upgrading their HVAC systems, and enhancing the insulating properties of the home’s exterior,” the report says.