Did you know that now is absolutely the best time in a decade to complete just about any home improvement project?
Think back five years ago when Hurricane Katrina devastated Louisiana. Simultaneous with that disaster, China and Saudi Arabia were charging ahead with massive development and Americans had just embraced the taste of Faith Popcorn’s cocooning sensation. Those factors created an insatiable appetite on basic construction materials from dimensional lumber, plywood, asphalt and all things metal (think nails, screws, joist hangers). Tested lessons from Econ 101 prove that when demand exceeds supply, the cost of those goods heads up.
And rise furiously they did. Those popular boom times were famous for generous pay raises, healthy employee benefit packages and respectable corporate profits. As imagined, home improvement projects were confidently priced. Note: profit is not a four letter word.
Most teams in our field have not received a raise for a few years, have fewer benefits and are quite pleased to just have a job to wear a loaded tool belt to. Material costs have plummeted and are at a decade low. Only this time, supply exceeds demand creating the perfect time for happy homeowners to take advantage of contractors and suppliers nervous disposition as margins evaporate.
Fortunately for those of us in the home improvement business, the Leading Indicator of Remodeling Activity, LIRA, projects that remodeling spending will likely increase on an annual basis by the end of the year and will offer a double digit rise in first quarter of 2011. This Harvard based study finds that homeowner optimism is fueling this trend towards investing in our homes again and that it is moving beyond simple replacements and energy retrofits.
My hopeful projection is that we will soon be reading about those edgy social trends we were experiencing a few stubborn years ago that created the nesting, cocooning and hiving buzz. Those of us who have built cool projects around these experiences know that fantastic living spaces, outside or inside, have the capacity to positively impact how our family and friends live.
If Econ 101 patterns prevail, expect to spend considerably more next year on home improvement projects. Smart consumers are building dream spaces, finishing basements, installing landscapes and patios now, and realizing huge value.