Effects of Changes in Ownership on Repair and Remodeling Behavior in Owner-Occupied Housing
Many real estate and remodeling professionals believe that most home remodeling projects are undertaken just before the sale of a housing unit (to increase the unit’s sales price) or just after (to suit the new owner’s preferences). This study uses data from the American Housing Survey (AHS) to test the accuracy of this belief and identify the kinds of home improvement projects that are performed just before or after a change in ownership. The AHS includes an extensive module on the types and costs of home improvement projects. Because the AHS is longitudinal by housing unit, researchers can retrieve data on the home improvement activity performed in the previous period as well as improvements initiated by the new owners. The data show that, contrary to expectations, sellers undertake fewer home improvement projects, and spend less on them, than do owners who haven’t moved. Compared with long-term owners, recent buyers undertake fewer minor projects, and their incidence of major projects is not statistically different from this control group. Among the 12 specific activities that showed a statistically significant difference between sellers and stayers, sellers engaged in less activity than stayers for 8 of them. In 16 of the 18 activities for which buyers and stayers were statistically different, buyers performed the activities more frequently.