Housing sales may be creeping back up but many expect that the remodeling industry won't return to the recent high levels of activity any time soon. Analysts at the Joint Center for Housing Studies at Harvard University point out that some of the recent home improvement spending was fueled by consumer belief that rising prices would allow owners to realize a return on their investment. The current housing climate offers no such assurance but there are pockets of opportunity in this industry.
You can help your clients target spenders by differentiating between homeowners who have lived at their current house less than 2 years and those who have lived at the current house for more than 20 years. These groups allocate their home improvement spending quite differently:
- Kitchens and baths 21%
- Other room additions 17%
- Systems and equipment 12%
- Exterior replacements 12%
- Interior replacements 15%
- Property improvements/outside attachments 19%
- Disaster repairs 4%
- Kitchens and baths 19%
- Other room additions 14%
- Systems and equipment 13%
- Exterior replacements 23%
- Interior replacements 11%
- Property improvements/outside attachments 13%
- Disaster repairs 7%
Your clients can also increase their revenue opportunities by targeting the three main demographic groups likely to spend on these projects:
Rental Housing Owners — These buildings were not invested in at the same rate as private residences during the recent housing boom and now require remodeling/maintenance and improvement.
Immigrant Homeowners — At least 10% of home improvement spending is linked to this demographic which is rapidly growing and forming new households.
Green Consumers — With tax credits in place, some consumers may be prodded to spend on replacement windows and doors and energy efficient heating systems.
Share this news with clients who sell goods and services related to home improvement and remodeling projects and show them how a targeted marketing campaign can reach consumers most likely to spend.[Source: The Remodeling Market in Transition, Joint Center for Housing Studies of Harvard University, 2009]