Americans Doing More Home Improvement Projects
Homeowners, feeling more secure in their jobs, are tackling maintenance projects delayed during the recession. That’s lifting the fortunes of the home-improvement industry.
After several years of perusing real estate listings and spending Sunday afternoons at open houses, Denise Majeski decided to stay put and fix up her 25-year-old Gurnee, Ill., home.
As the housing market languished even as the economy improved, Majeski determined the financially prudent course would be to fix up the house a little at a time, starting with replacing the windows and renovating the bathrooms.
“Initially we were thinking about moving,” said Majeski, 55. “But that would require a mortgage and additional amounts of money. We can do a home improvement at a pace that we can afford.”
It is a choice more homeowners are making these days and one that is lifting the fortunes of the long-suffering home improvement industry.
Seasonal hiring at Lowe’s Cos., the nation’s No. 2 home improvement retailer, is up 15% this spring as homeowners, feeling more secure in their jobs, tackle maintenance projects delayed during the recession.
And Home Depot Inc., the largest home improvement retailer, in February reported its first annual sales increase since 2006, before the housing market crashed. The home improvement business is stabilizing despite the continued weakness of the housing market, Home Depot Chief Executive Frank Blake said at the time.
“People are doing what it takes to be happy where they are,” said Jack Horst, retail strategist at Kurt Salmon, a consulting firm. “They are more likely doing maintenance and replacement than big fundamental changes.”
A few buckets of paint, brighter lighting and some new door handles are enough to make Rebecca and Bill Klies happy in their new home. The couple, in their 30s, bought their first condo last October in a short sale, in which a lender allows a homeowner to sell a property for less than the amount owed on the mortgage.
Now the Klieses spend weekends at Home Depot and Lowe’s getting ideas on how to fix up their West Loop loft without spending a fortune. They’ve swapped out light fixtures, recaulked the shower, put up new towel racks, installed a ceiling fan in the bedroom, bought new light switch plates, painted several rooms and touched up the molding.
“These are simple little fixes that make a big difference overall,” Rebecca Klies said.
At the same time, home improvement stores are getting an extra sales boost as homeowners dig out from a winter of lengthy cold spells. The severe weather has left shingles, gutters and downspouts in need of repair and lawns littered with broken shrubs and damaged trees.
“These are the have-to-do projects,” said Jim Kane, president of Home Depot’s northern division. “We’ve just come through a tough winter, and the winter has just taken its toll on all those things.”
Maintenance and repairs account for about 40% of Home Depot sales, up sharply from recent years when home sales slowed, said Daniel Binder, an analyst at Jefferies & Co., in a report last month.
Spending on home remodeling is expected to rise 9.1% in the first quarter to $125.1 billion from the same period a year ago, according to a widely followed index from Harvard University‘s Joint Center for Housing Studies. The last time remodeling activity for a three-month period topped $125 billion was the second quarter of 2008.
The center predicts the industry to gain momentum this spring with sales jumping 12.7%, to $132.9 billion, in the second quarter from a year ago, before tapering off to a 6.5% gain, to $123.5 billion, in the third quarter.
More homeowners are tackling basic house projects on their own instead of using general contractors, bringing in electricians or plumbers only for the toughest jobs, said Rich Cowgill, Chicago-area chapter president of the National Assn. of the Remodeling Industry.
Cowgill said he had noticed an increase in the size of the do-it-yourself classes he teaches as a volunteer at ReStore for Habitat for Humanity as more homeowners try to lay tile, replace windows or put up drywall.
“People are dressing up their homes because they’ve come to the realization with housing devalues that they’re not going to move,” said Cowgill, who also owns a home remodeling business.
Kris and Dennis Cortes of Flossmoor, Ill., are typical of the post-recession home remodelers, industry experts said. The parents of five children said they chose to stay in the home they bought 20 years ago and to give the house a face-lift. They are adding a couple of gables to the roof, installing a new garage door and updating the landscaping.
“We could buy the megamansion, but we choose not to,” said Kris Cortes, 46. “We’re choosing to allocate our resources more toward education, charity and savings. I do think the country at large is headed in that direction.”
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