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52 | M REPORT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Remote Work Drives Demand for Vacation Homes Demand for vacation homes swelled during the coronavirus pandemic—surging as much as 172% in April—as many sought escape from cramped city life amid lockdown restrictions. D emand for vacation homes in August fell 19.3% year over year, marking the third-con- secutive month of declines while demand for primary homes fell by 1%, its second-month of decline. According to Redfin Data Journalist Lily Katz, just because the numbers are down year over year it is important to note that demand for second homes skyrocketed by 172% during the pandemic and peaked in April. But as the market begins its seasonal cooling, demand for primary and secondary homes has begun to ease. Redfin Lead Economist Taylor Marr said that while interest in second homes is lower than it was a year ago, it remains above pre-pandemic and will likely stay that way due to a permeant shift in remote work. According to a recent report from the National Association of Realtors, sales of vacation homes made up 6.7% of all existing-home sales in the first four months of the year, up 5% year over year. The report also found that existing-home sales typically rose by 24.2% in vacation home counties— more than doubling the 11.2% pace "The pandemic isn't over, but the desire to escape isn't as intense as it was before. People are increasingly returning to life as normal, with kids going back to school and cities coming to life again," Marr said. "The housing market as a whole is still booming, just not as strongly as it was in the second half of 2020. Homebuyer competition, migration, and home-sales growth have all slowed." The analysis used mortgage-rate lock data from Optimal Blue, a real estate analytics company, to track the demand for primary and secondary homes. This data for this analysis was available because homebuyers must specify on a mortgage application whether it is for a primary home, a second home, or an investment property. Remodeling Market Expected to Hit $4.9 Trillion by 2027 Researchers say North America exhibited a considerable market share, as the economy picks up and owners add to and alter their houses in record numbers. A s home prices and sales continue to hit new highs, property owners are increasingly look- ing to remodel and update their homes as the supply of available units remains tight. A report by Global Market Insights, a Delaware-based market research and consulting firm, found that the current worldwide remodeling market is worth about $3.8 trillion and is expected to grow at a compounded annual growth rate of 4.1% resulting in a valuation of $4.9 trillion by 2027. Remodeling in the U.S. in 2020 made up a considerable share of that overall growth, Global Market reported, and they predict it will grow at about 3.9% CAGR through 2021, due in large part to the U.S. housing shortage as well as rising home prices. The residential remodeling market is expected to be the fastest-growing market segment worldwide. "Exterior additions and al- terations will showcase significant growth at a compounded annual growth rate of 3.8% through 2027," the report said. "Growth is attrib- uted to the rapidly growing remod- eling applications in porch, gardens, and garages as these renovations depend on several factors such as high-performance, all-weather resis- tance materials, type of architecture, stoop for landing, etc. The overall residential segment will eventually rise over the forecast period and is likely to be valued at over $2.8 billion by 2027. "The rapid growth of industri- alization coupled with increasing per capita income is positively compelling the residential renova- tion segment expansion," the report continued. "Geographical expansion of brands facilitates global service providers to enter the regional market. For instance, in August 2018, IKEA launched its first store in India to expand its consumer base, which will boost remodeling services during the forecast period." Though an increasing number of supermarkets, shopping malls and theaters will sustain the re- tail-space remodeling market, slug- gish growth from the COVID-19 pandemic in the commercial construction sector will somewhat limit future revenue generation. "The recent COVID-19 pandemic restricted the market growth owing to a halt in pro- duction, shrinkage of raw material supplies, and shortage of skilled workforce globally. Social distanc- ing and nationwide lockdowns to combat the spread of corona- virus have squeezed the revenue generation. Additionally, volatile raw material prices will further limit the industry growth. Lifting of lockdowns, rapid vaccination policies, and steady economic recovery are likely to offset these negative impacts and widen the business."