According to a new report from Harvard's Joint Center for Housing Studies, there is an uptick in home remodeling activity for Q4 2012 and an expansion on the horizon in 2013. I believe home remodeling is an important component to the growth of the economy both nationally and locally, and this report is another positive economic sign heading into 2013.
The center's Leading Indicator of Remodeling Activity (LIRA) shows strong spending in the second half of 2012, suggesting the remodeling recovery is already underway. Remodeling spending was up 8.2 percent in the fourth quarter of 2012, rising to $124.1 billion, compared to $115.1 billion at the same time last year. The LIRA projects annual homeowner improvement spending will see double-digit growth through the third quarter of 2013. The center is estimating that spending will continue to rise more than 19 percent in Q3 2013, to over $145 billion.
I have also taken a look at a second leading indicator released this week, U.S. Housing Starts, which had positive gains to close out 2012. Nationally, December 2012 posted a 36.8 percet increase year-over-year, and a 12 percent increase over November 2012. In the Northeast, there was a 37 percnet year-over-year increase in housing starts.
Construction jobs, whether they are new construction or remodeling, are an important part of our economy. With unemployment numbers continuing to head in the right direction, housing starts up significantly, and now the LIRA projecting double digit growth, it is safe to say the housing recovery is here to stay.
The recovery of home prices in Concord are supported by a year-over-year increase of 13 percent. Middlesex County has a 5 percent increase, while all of Massachusetts has seen a 2 percent bump in home prices, according to data compiled from MLS Total Sold Market report for the fall market 8/1-11/30.
With home prices on the rebound and the economy making positive strides, I expect to see additional towns rebound in 2013. More people will start to see home values increase as our economy heals.