The National Association of the Remodeling Industry (NARI) this week reported its second-quarter Remodeling Business Pulse (RBP) data with indications that business conditions continue to improve for remodelers. A new consumer survey from home services placement agency Redbeacon, reported in an infographic by Mint.com's MintLife Blog may explain why. (View the full infographic here.)
Summer Business Boost
According to NARI, remodelers' reports of overall business conditions have steadily increased over the last six quarters, currently with an index of 6.31, compared to 5.97 during the first quarter of 2013. “Many companies entered the summer with a backlog of jobs, which is something most haven’t seen in the past few years,” says Tom O’Grady, chairman of NARI’s Strategic Planning & Research Committee and president of O’Grady Builders, based in Drexel Hill, Pa. “What’s also positive is that the inquiries and bid requests are still steady, which provides some more market stability for remodelers.”
In addition to a boost in business conditions, quarter-over-quarter trends show a 4.7% increase in number of inquiries and a 3.3% rise in bid requests. Conversion of bids to jobs is up 4.6% over last quarter, and the value of jobs sold is up nearly 6%.
NARI says these trends are expected to continue as remodelers predict that three months out, their sales will be as strong as they are now. The No. 1 and 2 reasons for growth continues to be postponement of projects (up 5% at 87%) and improvement of home prices (up 6% to 65%), but economic growth has moved into the No. 3 reason for growth, at 49% (up 7%).
Homeowners Ready to Hire
Increases in remodeling work may come as no surprise to researchers who conducted Redbeacon's recent survey on "Do it For Me" vs. "Do it Yourself" work. While 90% of survey respondents said they had attempted do-it-yourself (DIY) projects at home, the report found that "after attempting a few DIY projects themselves, it seems people become more willing to hand the job over to a pro the next time around." Wasted time and household infighting during the course of a DIY project were two popular reasons to hire a pro.
In fact, according to Redbeacon, 71% of Americans said they'd make some surprisingly significant sacrifices to hire home-service professionals:
- 56% would stay off social media for a year
- 36% would give up watching their favorite sporting events
- 35% would stop eating out
- 23% would hand over their workplace vacation days
- 20% would give up sex for a year
Overlapping with NARI's report of increasing remodeling activity propelled in large part by projects that had been held over from previous years, the DIFM survey notes that 64% of homeowners have planned DIFM projects for 2013, and half said their more inclined to outsource work around the house than in years past. What respondents are not looking forward to is the actual hiring process.
Two-thirds of Americans (64%) said the uncertainty of determining fair pricing is the most frustrating part of hiring a service professional, while 42% said the toughest part is the time involved in finding the right person. In fact, rather than deal with the frustration of finding a DIFM pro:
- 24% of homeowners would rather sit in traffic
- 21% would prefer to wait in line at the DMV, and
- 20% would rather go to the dentist.
Continuing the Trend
After the first-quarter RBP was published in April 2013, O'Grady commented that "homeowners are tired of waiting to make improvements, many have chosen to stay put, and better financial positioning has them actively approaching professionals to get work done and enhance long-term livability of the home.” Assuming remodelers can earn homeowners' trust and make the DIFM process better than trip to the dentist, NARI says remodelers remain optimistic through the second quarter, though raise a few points of caution.
General certainty about the future of the market, low interest rates, and stock market growth will all play into how the residential remodeling market moves forward. Disaster clean-up will also be a factor.
“One of the things we saw from the comments of the second-quarter RBP is that many homes were impacted by disasters in the past three months from the storms along the East Coast, tornadoes in Oklahoma and the explosion in Texas,” O’Grady says. “Remodelers in those areas are involved in the clean-up, and that’s impacting their businesses.”