Market Memo

In May, the Census Department published the final quarterly numbers estimating residential alterations and residential repairs. After 40 years, the C-50 report, which was often subject to many revisions and proved to be unusually volatile, was cancelled. But for all of its short-comings the C-50 report was the best we in the remodeling industry had as a benchmark of activity. By federal government standards, the C-50 was not a very costly program to run — about $1 million annually — but it had been under threat for cancellation many times in the past. This past fall, the C-50 appeared to have been saved from the cutting block after last-minute lobbying heroics put forth by prominent members of the industry. But, by the time of the spring meeting of the Remodeling Futures program rolled around on April 15, the die had been cast and the program had been irretrievably lost.

This is problematic however, because the C-50 report, had been the backbone of Harvard’s Remodeling Activity Indicator and more recently in the Leading Indicator of Remodeling Activity or the LIRA.  There is talk of development of an improved report from Census, but because of the lead time needed to get approvals, build research models, gather the data, and tabulate the data before any research is compiled, the earliest such a new report would be released is several years from now. Until that time, researchers are looking elsewhere within government reports to try to collect a similar set of data.

A fix for the LIRA was found in another government report on construction, the C-30. It reports on residential alterations, but not repairs. As a result, Harvard was able to keep the LIRA going with minimal change to the efficacy of the results, but the maintenance and repair component of remodeling activity will not be represented.

Discretionary remodeling (alterations) are hugely important to remodeling, but as the housing market slows and the number of homes sold each year slows, the importance of maintenance and repair as a sector of remodeling is set to take on a renew prominence in the market. It is a shame that an industry as large as remodeling ($290 billion) has such a dearth of government numbers, while home building and other sectors are well tracked.