Home Improvement Projects On Up Swing

By Cheryl Reams

As homeowners decide to stay put and wait out the housing market in rising numbers, home improvement stores are seeing an increase in sales of carpet, vinyl and cheaper products to spruce up homes. The nation’s largest hardware stores are experiencing an upturn, despite economic turmoil.

kitchen remodel

Contractors have slashed prices in order to attract more business, and get homeowners to install new flooring, carpet and give kitchens a shiny appearance with new kitchen cupboards and counters. Home owners spend more on bathroom and kitchen remodeling than any other rooms in the house.

An American Express opinion poll released recently found that 62% of those surveyed plan on spending more in 2010 on homeowner fix-ups with an average of $6,200 targeted for remodeling projects. Harvard University’s Joint Center for Housing Studies estimates that the home improvement business will see a 5% improvement in 2010.

The increase in work is good news for contractors, many of whom have been idled by the housing downturn. The country’s two largest home improvements chains, Home Depot Inc. and Lowe’s Co. are gearing up for a rise in spring and summer sales. The two chains saw their stock prices tumble in light of the housing downturn as contractors and builders bought less as a result of little or no business at all.

Harvard researchers expect the industry to undergo sweeping changes. “Over the past several decades when house prices were on the rise Americans invested in discretionary home improvements as a wealth building strategy,” said Harvard’s 2009 report on the state of the industry. “Now with house prices still falling, owners are more likely to make improvements primarily to maintain the structural integrity and efficient functioning of their homes as well as to generate cost savings.”

exterior walkway

However, researchers anticipate a less severe impact in the home improvement industry than home building, and many analysts say it will be evident that the downturn in the industry will be well on its way to a full recovery by mid-summer.

“The worst of the economic cycle is likely behind us,” said Lowe’s Chief Executive Robert Niblock. The Mooreeville, North Carolina based company had only seen growth since it began its large expansion until the real estate market bust. “We’ve been waiting for this transition for a long time,” said Niblock.

The worst of the downturn does seem to be behind Lowe’s and other home improvement and appliance related stores with rising sales in paint and other less expensive products. A small increase in sales is a welcome step in the right direction for Lowe’s and other home improvement retailers.

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