lead to mobility and housing turnover that drive the
remodeling market.
"When we look at published work that is out there, it
tabulates the AHS data and shows that mobile house-
holds generally spend more. We don't disagree," he says.
"However, when it is a question of whether it is a driver —
the primary driver — what we learned is mobility tends
to happen when times are good. Home prices are rising.
Incomes are improving. Other things are going on. And
sample basket of various projects that ft into that category,
then conducted dollar weighting by market size."
For many years, industry watchers have looked to ex-
isting-home sales as an indicator of future remodeling
activity. Many respected studies of American Housing
Survey data back this conclusion. But Tomalak says
the Burns team's work suggests the relationship is more
nuanced; existing home sales should not be labeled as
universally good or bad. It is really the conditions that
2007 2008 2009 2010 2011 2012 2013 2014 2015P 2016P
$90
$80
$70
$60
$50
$40
$30
$20
$10
$0
Billions
$USD
Burns Residential Repair and Remodel Spending: Rental Remodels
■ Rental Big Projects ■ Rental Small Projects ■ Rental Disaster Repairs
Source: U.S. Census; John Burns Real Estate Consulting LLC; National Apartment Association, Harvard JCHS (Data: July-15, Pub: Sep-15)
JBRC expects rental big-project remodel spending to nearly double from 2010 levels in 2015 and 2016. This is driven by a higher volume of single-
family rental units, property appreciation, and flat capital rates. Rental remodeling will grow 7.1% in 2015 and 3.5% in 2016.
2011 increase in big-ticket rental improvement
from over 1 million new rentals and higher
property valuations, as reflected in cap rates
2007 2005 2008 2006 2009 2010 2011 2012 2013 2014 2015P 2016P
$1,800
$1,600
$1,400
$1,200
$1,000
$800
$600
Burns Residential Repair and Remodel Spending:
Rental Remodeling Outlay per Rental Unit
Source: John Burns Real Estate Consulting LLC (Data: July-15, Pub: Sep-15) Note: Above values are nominal, not adjusted for inflation.
Larger, big-project remodels of rental properties have been increasing since 2010. Increased single-family rental volume has resulted in higher
levels of expenditures versus prior cycles. Rental remodeling spending will break records in 2015, driven by rental appreciation.
$1,364
$1,493
$1,506
$1,412
$1,277
$1,126
$1,242
$1,435
$1,513
$1,565
$1,620
$1,654
SPECIAL REPORT: Industry Research
24 October 2015 QR QualifiedRemodeler.com