Let’s Dig Our Own Pool

July 10, 2024
  • Pool construction has fallen 49% since its peak in 2021
  • Demand surged because of the pandemic changes
  • Falling home sales slowed demand

During the height of the pandemic, urban dwellers were craving more space and more utility as they sought out homes in the suburbs. Outdoor equipment became paramount in the race for more “outside options” as many of these renters became first-time buyers by moving to the suburbs. In NYC, many residents left for green grass and picket fences.

Manhattan home sales plummeted in the last three quarters of 2020. After all, who wants to let strangers into their apartment during a global pandemic? Renters were less restrained, as many renters paid their rent until their 1 or 2-year leases expired as they purchased their new homes.

Cool (Pool) Charts That Illustrate The Drop (no pun intended) In Demand

Pool construction surged in 2020, peaking in 2021, and just finding a contractor to build a pool on a new house became seemingly impossible.

In 2022, interest rates began to surge, helping scale back demand for home improvements. One of my sons bought a house and built a pool at his new home during the period of peak frenzy. Finding a reputable contractor to hire and build the pool required waiting about 5 months and costing a small fortune.

The limited supply of contractors drove the price significantly higher in a short period. Add in the endless requirements by the local municipality and then periodically beg the town inspector to come out to view the latest required upgrade. He eventually got his pool but it was a slow, expensive, and painful process. While that’s usually the case, it was made a lot worse by the sales frenzy of the housing boom.

The migration from cities has subsided and the surge in mortgage rates has chilled home sales and the amenity purchases they usually drive. The following charts make perfect sense. The surge in demand, really poached demand from the future in the form of migration out of the city. And the surge in costs shut down demand for pool construction pretty quickly.

The costs of the pool amenity fell very fast and now they are below 2006 levels, yet home prices themselves haven’t fallen significantly. This shows that extra features are getting hit much harder than homes themselves.

When I think of building a pool, I remember Comedian Joel McHale had a “digging my pool” comedy tour as he chronicled his frustrations when trying to get a pool built in the backyard of his Los Angeles home. Hilarious and sad at the same time as I listened to him navigate the LA government bureaucracy. I can’t find the post but I understood he gave up in his quest for a pool in his backyard.

Admittedly this post was a little shorter than usual because I needed to make time to jump in our pool.

Did you miss yesterday’s Housing Notes?

July 9, 2024

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