Similar analysis was conducted to tease out the amount
of remodeling activity that is related to professional labor.
According to the Burns model, in 2014 $108 billion was spent
by professionals on building materals, $69.3 billion was attrib-
utable to DIY expenditures, and $88.2 billion was the amount
of the total ($266 billion) assigned to professional labor.
"Te Harvard numbers do a great job getting a visible
mix of how many projects are pro versus DIY," Tomalak
says. "Obviously, DIY is mostly materials. So what we did
to get the labor portion out of the pro sector was look at a
planning and more decision makers were required (both
spouses instead of one), Tomalak explains. "We divided proj-
ects qualitatively by high-time involvement and low-time
involvement. Ten we separately created a series of price
curves, and we looked at the project fall-of rate. Certain
projects are more price sensitive and when the price goes up
we see fewer projects. And certain projects have a fatter price
curve, meaning they tend to be less price sensitive. When
we looked projects both of these ways, it turns out they both
kind of converged around the $5,000 mark."
2007 2008 2009 2010 2011 2012 2013 2014 2015P 2016P
$250
$200
$150
$100
$50
$0
30%
20%
10%
0%
-10%
-20%
Billions
$USD
%
Growth
YOY
Burns Residential Repair and Remodel Spending: Owner Occupied Remodels
■ Owner Big Projects ■ Owner Small Projects ■ Owner Disaster Repairs % Growth YOY
Big Project Owner Remodeling Growth
Source: John Burns Real Estate Consulting LLC; FEMA (Data: July-15; Pub Aug-15)
Owner big-project remodel spending bottomed out in 2011 and has been slowly improving since that time. Big project spending is forecast to grow
5.6% in 2015 and 10.0% in 2016. Owner R&R; spending is forecast to reach $222.1 billion in 2016.
Source: John Burns Real Estate Consulting LLC, 2015.
Big-project owner remodeling growth will include 2.0% more projects and 7.9% higher spending per project in 2016.
2014 increase from 18% increase in
small-ticket maintenance spending, driven
by deferred repair projects from prior years
0.9%
Growth in owner
households
1.1%
Growth in big-project
remodels per household
1.7%
Inflationary price
increase
6.2%
Trade-up in project
type and product mix
$72.9 Billion
2016 forecasted
big-project R&R;
spending
7.9% Increase
in spending per remodel
2.0% Increase
in big-project remodels
$66.3 Billion
2015 baseline big-project R&R; spending
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22 October 2015 QR QualifiedRemodeler.com