More Homeowners Pursue Remodeling Projects
Although the recent stabilization in the real estate market and the economy remains tenuous, American property owners have grown increasingly willing to undertake home remodeling projects. ServiceMagic.com's most recent Home Remodeling and Repair Index, released last month, shows that remodeling service requests increased by 37 percent in the fourth quarter of 2009 from a year earlier. The increase is linked to homeowners' confidence in their economic well-being, which has improved notably since the fourth quarter of 2008, says ServiceMagic.com CEO
In addition to improving consumer sentiment, what is making property owners more willing to undertake home remodeling projects?
Some of this activity that seems much higher than you would expect is driven by the fact that people weren't moving, so they are now starting to put money into improvements. They say, "Hey, with 20 percent of the population underwater on their mortgages, I know I am not moving anytime soon. So I am going to start putting some money into improving the living conditions of where I live now."
Service requests for window replacements more than doubled between the fourth quarter of 2008 to the fourth quarter of 2009. What's behind this trend?
Window replacements are both energy efficient as well as aesthetically beneficial. There are various state and federal tax incentive programs that are driving that trend. People are saying, "Hey, I can increase the aesthetics of the home, I can tap into some government money and incentives, and I can save on my energy bill." So that is a popular category. In fact, 53 percent of homeowners told us they were looking for green alternatives for their window replacement projects in the fourth quarter.
What other energy-efficient home improvement projects have increased in popularity?
We are continuing to see a lot of activity in home energy audits. I think it's indicative of people saying to themselves, "I need to figure out how to make my home more energy efficient, but I don't really know how to." So it will lead to more activity. [Energy efficiency audits] are usually
Roofing requests increased 34 percent. What is behind that development?
When times are tight you can put roofing off for a little while, but it leads to much bigger problems. So I think what we are seeing is that there is some pent-up demand from people who held off on repairing their roofs until they understood where home values would settle. And finally they said, "Look, we need to get this work done."
How do you see the recovery in the home improvement industry progressing?
It's going to take some time -- we're not going to experience a rapid resumption to 2007 levels in terms of homeowner spending. It's going to be a very slow recovery because people are just going to need to build equity back in their homes. That's how most of this activity is fueled. We were at a very depressed level for the last year and a half. We will improve from there, and the activity we are seeing from homeowners tells us they are ready to start remodeling their homes again. But we expect homeowners will make more modest improvements in terms of the size and scope of their remodeling projects.
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