Remodeling by Zip Code: NAHB Releases 2014 Projections

May 26, 2014

NAHB just released new estimates of spending on improvements to owner-occupied housing by zip code.  The estimates are based on a model relating improvement spending to five key variables (number of homes in the area, the share built in the ’60s, share built in the ’70s, owners’ average income and level of education), projected to calendar year 2014.  As before, the estimates show total spending on improvements, as well as spending per home, in each zip code.

On average, total spending on improvements in a zip code is projected to be about $5.1 million in 2014.  The top 5 total-spending zip codes are all in Maryland, Texas, or Illinois.  Each of these top 5 zips contains at least 15,000 owner-occupied homes and home owners who average at least $145,000 in income and are 60 percent or more college educated.  Most of these top 5 zips don’t have an unusually large share of homes in the key vintage for remodeling (homes built from 1960 to 1979), except for the zip at the very top of the list—#20854 in Maryland, a close-in suburb of Washington DC.  20854 is the only zip where over $60 million in spending on improvements is projected for 2014, and over half the owner-occupied homes in that zip were built 1960-1979.

The map below illustrates improvement spending per owner-occupied home.Remodel_zecta14

In the average zip code, improvement spending per home is just under $1,600.  The top two zip codes by this measure are the same as they were in 2013: #94528 (in a suburb of San Francisco) and #10007 (in Manhattan).  These are the only two zips with projected spending per home of over $5,000 (even over $6,000 in 94528), although several others come fairly close.  This year, unlike last, a zip code in New Jersey cracked the top five—#07078, a suburb within commuting distance of New York City. Homeowners in the top 5 improvement-per-home zips are at least 92 percent college educated and have average incomes of at least $350,000. Nearly half the owner-occupied homes in top zip #94528 were built 1960-1979.

The improvement spending projections for 2014 are based on a statistical model developed by NAHB economists using data from the HUD/Census Bureau American Housing Survey and summary statistics for the Census Bureau’s approximation of zip-code areas from the American Community Survey. Members of NAHB Remodelers can log onto NAHB’s web site with their usernames and passwords and access improvement spending projections in more than 25,000 zip codes here. Projections aggregated to the state level are available to everyone, and are reproduced below:

State Remodeling 2014

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Owners Spend $1.9 Million to Remodel in Typical Zip Code

January 21, 2014

Home owners in the typical zip code area spent a total of $1.9 million to improve their homes in 2013, according to new zip-level estimates developed by the National Association of Home Builders (NAHB).  This works out to about $1,400 per owner-occupied home within the zip code (based on the median across all zip codes estimated by NAHB).

The estimates are based on a statistical model developed by NAHB, using data from the HUD/Census  Bureau American Housing Survey) that relates remodeling expenditures to the number of owner-occupied  homes in the area, the share of those homes built in the 1960s and 1970s, the average home owners’ income, and the share of owners  who are college educated.  The model is applied to data from the Census Bureau’s American Community Survey, using  geographic boundaries developed by the Census Bureau to capture zip code mailing addresses.

The estimates of remodeling  by zip code were produced by NAHB economists for NAHB Remodelers.  Those who are not members of NAHB Remodelers and have questions about the zip-code level data can contact NAHB Remodelers staff.

While the median level of spending on improvements is $1,400 per owner-occupied home, it can be as high as $5,000 in particular cases.  Estimates for the top five zip code areas in the country by this measure are shown below.

Top 5 Zips

These five zip codes are located in the suburbs of San Francisco, Manhattan, and Long Island.  They’re characterized by home owners who are 73 to 93 percent college educated with high average incomes (roughly at or above $400,000).  The first and fifth zip code on the list also have a high percentage of homes built in the 1960s and 1970s, an age when the NAHB model indicates homes undergo above-average remodeling.

The map below shows average spending on improvements per owner-occupied home by zip codes.

Remodel_zecta3

For convenience, the estimates have also been aggregated up to the state level:

Remodeling by State