Discretionary Home Improvement Projects Seen Increasing
Payment by Cash Gaining Steam in Third Quarter 09 Study
-HousingZone
Golden, Colo. (November 5, 2009) – Americans are, once again, devoting significantly more of their resources to discretionary home improvement projects, according to the ServiceMagic.com Home Remodeling and Repair Index for the third quarter of 2009. Homeowners who previously delayed elective projects or had, instead, focused on DIY projects swung the pendulum back this quarter by hiring home professionals with an emphasis on remodeling projects, up 14% from the third quarter of last year.
Economic challenges and limited available credit lines in the preceding four quarters forced consumers to reevaluate spending, including the method of payment, leading to much less financing and more cash-in-hand transactions for discretionary projects. Results from ServiceMagic’s quarterly consumer sentiment survey indicate that of the 67% of cash-paying homeowners who took part in a remodel or addition project, 85% actually preferred this method of payment over financing (15%) or using a credit card (7%).
The Q3 2009 ServiceMagic.com Home Remodeling and Repair Index is based on the 1.5 million service requests received by homeowners across the country, using ServiceMagic.com. The entire survey can be found at http://servicemagic.com/survey .
For the first time in 2009, ServiceMagic.com, the leading website connecting homeowners to prescreened, customer-rated contractors, reported an increase in requests for ‘Cleaning & Maid Services,’ a category that was a tell-tale sign of tightened home spending at the beginning of the recession. Once shunned discretionary projects are now on the rebound including:
- Window coverings
- Siding
- HVAC Deck construction
With the onset of the recession, homeowners had begun to shift away from elective improvement projects and putting more of their resources into repairs. But in Q3, larger remodeling projects, which showed modest gains in Q2, continued to build steam along with smaller projects such as countertop and cabinet replacements.
“Homeowner optimism has continued to improve and more people are willing to confidently invest in home improvements beyond required repairs and maintenance,” said ServiceMagic.com CEO Craig Smith. “The combination of consumer sentiment and available cash contributed to an uptick in remodeling categories and foreshadows continued growth for the foreseeable future.”
Across the country, ServiceMagic.com also highlighted more activity in the East confirming the region’s renewed optimism looking at homes as investments. Moving west, eagerness diminished slightly but is still moving forward.
According to the Harvard University’s Joint Center for Housing Studies, homeowner spending was cyclically in its steepest rate of decline one year ago and “we are seeing consumers once again taking action in this quarter versus daydreaming about opportunities for home advancements,” adds Smith.
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