What to Expect When Remodeling in 2024

With the pandemic finally in our rearview mirror, where is remodeling headed in 2024? Here’s what the current market looks like and what you can expect to see as the year progresses (barring any surprises, of course!):

• Slower (or no) growth in overall remodeling projects – According to data compiled by John Burns Real Estate Consulting, LLC, the overall volume of home renovation projects in California has stalled. While it rose significantly in the 2020-2023 time frame, it’s beginning to level out and even decrease in some areas.
• More ‘replacement’ type home renovations – The demand for smaller home remodeling projects like replacing doors, siding, or roofs has remained steady and is even increasing in some cases. Due to new regulatory demands, there are also new tax incentives for greening your home.
• Fewer ‘luxury’ or ‘nice-to-have’ remodeling projects – While 2020-2023 saw an increase in discretionary spending on things like patios, pools, and outdoor kitchens, homeowners are trending toward focusing on ‘must-have’ remodeling projects in 2024.
• Higher remodeling costs – While building supply costs have leveled out some, they’re still higher than pre-pandemic prices. Thanks to higher material costs as well as rising labor rates, remodeling in 2024 will cost more than it did prior to 2020.
• Under-supplied housing market – Between new households formed, 2nd home purchases, and tear downs, the market is under-served by 1.7 million homes leading to a housing shortage, which again will push homeowners to consider creative ways to make their home work. Whether an ADU for multi-generational living, rental income, or office space – it may be the wave of the future with fewer housing options available on the market. And as referenced with supply and demand, home prices will increase based on the shortage of supply.