What both new and experienced home buyers want in renovations
According to Nino Sitchinava, principal economist at Houzz.com, “Over half of 100,000 homeowners surveyed by Houzz planned to continue or start renovations in 2017, and planned to spend an average of $27,300— a 4% increase from the 2016 planned spend.”
She adds, “The tight housing market is creating opportunities for remodelers and paint professionals. With new construction lagging and older homeowners staying put, first-time home buyers are buying smaller, older homes that need a lot of work.”
THE FIRST-TIME BUYER OPPORTUNITY
According to the survey, first-time buyers spent 22% more on remodels in 2016 than they did in 2015. “Because the properties they’re buying are old, they tend to renovate four rooms at a time versus the two-and- a-half rooms that long-term owners (been in their home for 6+ years) tackle,” says Sitchinava.
THE REAL OPPORTUNITY WITH REPEAT BUYERS
“In almost every way,” says Sitchinava, “repeat buyers represent the biggest opportunity for pros. In addition to representing 80% of the renovation market, the scope of work they take on is bigger, they spend more overall—an average of three times more—and they tend to hire direct.”
Also of interest, repeat buyers were found to upgrade exterior paint more frequently than first-time buyers and long-term owners (17% first-time buyers, 21% long-term owners, 24% repeat buyers).
CREDIT CARDS GAINING TRACTION
The report also revealed a rise in credit card usage between 2015 (21%) and 2016 (23%) while all other payment methods remained stable.
Sitchinava points to a few reasons for the change. “For younger buyers with few financial resources, credit cards are often the only option. If their debt-income ratio is off or their credit score is low, a bank is not going to loan them money. Plus, getting a loan can be a hassle and time-consuming. You skip that when you go with plastic.”
CUSTOM IS KING
Regardless of where they are in they buying cycle—first-time or repeat buyers—home buyers are taking a decidedly custom approach to renovations.
“Across the board, home buyers are approaching renovations with customization in mind,” says Sitchinava, “It’s no longer about playing it safe for resale. Owners are doing what they need to do to make the place their own and somewhere they can stay for a long time … it’s a great time to be marketing creativity, high-end design, and craftsmanship.”