Editor’s Note: Remodeling Gets a Pandemic Boost
authors Patrick O'Toole | August 18, 2020
All of us would strongly prefer that COVID-19 never happened. So much has changed since the new year began, that it’s hard to recall that back on
Jan. 1, most of you were humming along quite nicely. Backlogs were healthy. Lead flows were strong, albeit costly. You were brimming with ideas for how to get off to a strong start then ease into a more tepid second half, which would be accompanied by the usual client tentativeness before a presidential election.
Crisis Leads to Opportunity
Now, after scrambling through March and April to make sure your feet are underneath you, many have come to find that demand for remodeling remains high. You have rebounded quite nicely despite all that has happened. Yes, the usual flow of leads from home shows and events evaporated. Yes, many thousands of projects were on hold for several weeks. Yes, obtaining PPE and adapting to fast-changing safety protocols took extra time and money. But, as NARI President Doug King, CR, writes in this month’s education column, the pandemic has certainly presented remodelers with its share of opportunities.
New consumer research is bearing this out. Of 1,300 homeowners polled in May by LightStream, a consumer lender, nearly three-quarters plan to pursue home improvement projects this year. The average price tag cited was approximately $12,000.
Similarly, Bank of America polled 1,054 consumers about their planned purchases relating to COVID-19 and found that 70 percent will tackle either a DIY or pro home improvement project this year. The study also saw evidence of even stronger home improvement demand in 2021.
Remodelers Report Higher Requests and Closing Ratios
Aside from consumers, research among remodelers and general contractors also indicates positive conditions. Polls conducted by the Farnsworth Group on behalf of the Home Improvement Research Institute (HIRI) found that 69 percent report increasing project requests. This figure is steadily on the rise: 47 percent in March, 66 percent in April and 66 percent in May. Health and safety requests were the top driver initially, but that has shifted over time to being driven by homeowners being available and at home.
Closing ratios are improving as well. In July, Farnsworth/HIRI found that 79 percent of remodelers cited higher closing rates. Among those, 70 percent said demand is being driven by homeowners being available and at home. A secondary driver, 59 percent say, is a desire for health and safety solutions.
Even More Positivity
The latest economic indicators are also lining up favorably behind remodeling. After dipping during the initial phase of the pandemic, existing-home sales—a strong precursor to remodeling and home improvement activity—popped up 20.7 percent higher in June. New-home sales are up too. Home buying is being driven by very low mortgage-interest rates and a resurgence of interest in single-family detached living.
Another dose of positivity comes directly from you. Our annual Top 500 report, in this issue, includes interviews from all segments of the industry. It shows clearly that COVID-19 is not slowing down big firms. In fact, it may be having the opposite effect. QR