In 2022, the new home industry is poised for a boom, not a bubble. In the mid-2000’s, the country went through a housing bubble in which money flooded the housing industry and overbuilt speculative housing considerably with the hopes that buyers would be there. As most know- it was a bust when the money ran dry and unqualified buyers defaulted on homes. The current situation is different because qualified buyers are buying homes and they are living in them, and housing inventories are woefully low. This is a true housing boom similar to the conditions after World War II.
With the increase in home prices and the lack of available inventory, many current homeowners that may want to buy a new or different home will be priced out of the market. If you are the thinking about selling the home you bought 5 years ago, even with the equity in the home, it will probably not get you a nicer home. This will force home-locked homeowners to remodel, and I truly expect a multi-year in remodeling. Based on trends I am seeing now and the new regulations coming down, here are my Top 5 remodeling projects for 2022.
Number one is adding room or more living space to the home. If you are living in a small house that your needs have outgrown, the best course is to add square footage to the home. It may not just be an additional bedroom, it could be a home office, a new bathroom, or a bonus room for family events. With the price of dining out soaring, expect the home to become the new dinner party destination for many families.
Next is creating a home office within the home. Little doubt, the COVID-19 pandemic and new technology have changed how America goes to work. Working from home saves companies billions in office expenses, plus it allows them to hire people they might not be able to recruit. With the tight labor markets, talent can work from anywhere and companies are changing their workplace paradigms. It may soon become commonplace that every new home has an office.
Cooking at home is a growing priority, not only due to the high cost of dining out, but, also as a result of all the amateur chefs being created via the internet and direct home delivery of food preparation kits. Dinner parties at home are becoming more popular, and to make them a success, you need a nice kitchen with appliances in good working condition. I expect kitchen remodels are about to boom as these new chefs and dinner party specialists want to have the best to impress their friends and family. Recently, a good friend of mine purchased a new air-fryer type of oven for Thanksgiving despite having a stove that works perfectly well. In other words, he bought a new $1,500 stove to cook a $30 turkey.
Enjoying a glass of wine while soaking in an amazing tub in a beautiful bathroom is the ideal scenario for many. For the homeowner trapped in their current home, a beautiful bathroom with all the modern luxuries would be the answer. Expect bath remodels with high-end fixtures to become very popular over the next few years. The only problem, due to supply chain disruptions causing long wait times, homeowners will have to be patient when ordering the upscale fixtures and ceramic tiles.
As the new government mandates for energy efficient homes with tax credits get implemented, expect a lot of new windows and doors installed in older homes across America. Many older homes have outdated, worn-out doors and windows that homeowners want to replace to update curb appeal. I expect heavy activity in door and window replacements, but this will be tempered due to supply constraints. In fact, if doors and windows were in normal supply with shorter lead times, this would probably be a Top 3 project.
An remodeled older homes is the homeowner’s ticket to preserving equity and getting what they want out of their house. Due to the overall demand in the housing market, lining up subcontractors and suppliers will add more stress to the project, but there is no need to wait. Get your project going and just be aware that it will take longer. Unfortunately, chances are the lead-times in 2023 will be no better.
Don Magruder is the CEO of Ro-Mac Lumber & Supply, Inc., and he is also the host of the “Around the House” Show which can be seen at AroundtheHouse.TV.