Over the last few years, many optimists have been beaten down by the economy and have become pessimists. My goal is not to try to convince you that everything is great, but I do believe you need to at least appreciate that there are many reasons to be optimistic. The glass is half full.
Take a more optimistic view and you’ll be more creative in identifying opportunities and more proactive in taking advantage of them. Here are a few reasons for optimism.
Upkeep, not keeping up. Homeowners may have stopped competing with “The Joneses,” but they cannot allow their home — their most important asset — to deteriorate. Yes, they have been putting off remodeling projects for the last few years because of the economy, but their house doesn’t know there’s been a recession; it still needs care.
You are the home expert. Communicate that knowledge to the homeowner and the conversation will change. Those who are listening can already hear the remodeling talk growing louder, and an increase in remodeling activity is inevitable.
Savings, not stocks. Confidence in stock market investments is low. While this may not be positive for the overall economy, it’s a plus for remodelers because a volatile stock market makes investment in the home appear more stable by comparison. And, even though we read about high unemployment, the fact is that most homeowners still have jobs. Equally important, most Americans have been trying to increase savings and reduce debt. That not only makes them feel more secure, it improves their credit rating. Eventually, they will spend some of that money remodeling their homes.
Cheap money. Speaking of credit ratings, even with all the predictions that interest rates will increase, actual interest rates are still very low. If your clients have good credit and the means to repay a loan, money is still cheap right now. Plus, rumors and uncertainty about potential interest rate increases will serve to push homeowners off the dime and prompt them to act on the remodeling projects they have been postponing for so long. In fact, it makes more sense to remodel now, with interest rates this low, than it did five years ago, when rates were higher.
If properly guided by their remodeling advisers, homeowners should see the wisdom of tackling more projects now before rates go up. Their budgets may not be as extravagant as they were five years ago, but the scope of work should be in sync with the cost of the money.
Growing investment. While many remodelers may not be positioned optimistically, many manufacturers see a bright future for the industry and are investing more heavily into remodeling than new construction. As I see it, they would not be doing that if they did not have a pretty good feeling about the future of remodeling. Manufacturers don’t have a crystal ball, but they base their decisions on rational analysis, not emotional reactions. I’m not suggesting that their judgment is infallible, but their behavior is another reason to be more optimistic.
Silver lining. The foreclosure problem continues to cast a shadow over the recovery of the housing industry, but not all of the news is doom and gloom. While I empathize with the families who are losing their homes, when those homes change hands, remodeling happens. In fact, more money is spent on remodeling in the first year of ownership than during any other period of home ownership. The churning caused by foreclosures can create the opportunity to bring some homes and communities back to life.
As I stated at the beginning of this column, I’m not here to sugar-coat current market conditions. But I do sincerely believe that the opportunities for remodeling are real and strong. I also believe that, as experts in remodeling, it is our job to be the voice of reason for clients and not to succumb to the sky-is-falling mindset. If you can spend just 30 minutes each day looking at the glass half full, you will be amazed at what else you will see.
—Mark Richardson is co-chairman of The Case Institute of Remodeling, which provides business educational tools and events for the remodeling industry. firstname.lastname@example.org; 301.229.4600.