|
Remodelers See Slight Market Erosion in Year's First Quarter
Remodelers saw activity erode slightly in the first quarter of 2007, according to the latest NAHB Remodeling Market Index (RMI).
The component of the index gauging remodelers’ views of current market conditions slipped from 48.2 to 46.1 on a seasonally adjusted basis while their future expectations edged up from 46.0 to 46.4.
Index readings below 50 indicate more negative than positive responses.
"Compared to the major up-and-down cycles of the new home market, remodeling activity remains fairly steady," said NAHB Remodelers Chairman Mike Nagel, CGR, CAPS, a remodeler from Chicago. "A significant part of the remodeling market comes from work that home owners cannot delay — like replacing a roof — keeping the industry relatively stable during housing market downswings."
Regionally, RMI readings for this year’s first quarter were comparatively strong in the Midwest, with current conditions rising from 44.4 to 47.5 and future expectations jumping from 35.7 to 44.7.
The other parts of the country registered declines in current market conditions and future expectations: in the Northeast, those components moved down from 45.7 to 43.4 and from 50.1 to 44.3, respectively; in the South they were down from 52.8 to 45.9 and from 51.1 to 50.7; and the West saw declines from 52.4 to 48.2 and 51.3 to 45.0.
"The remodeling industry certainly benefited from the record numbers of home sales during 2004 to 2005, and the subsequent spending on home customization that follows housing turnover," said NAHB Chief Economist David Seiders. "The remodeling market shows relatively strong activity despite the substantial downswings in home sales and new home starts since early last year, and we feel that the trillions of dollars in home owner equity will help buoy the remodeling market in the near future and drive long-term growth as well."
The index registered some slight improvement in the market for remodeling rental properties, as the current market for remodeling by home owners appeared to be losing ground. The remodelers surveyed for the index were somewhat more optimistic about future prospects for owner-occupied units and a bit less positive about the outlook for rentals.
The first-quarter survey also asked participants for profile information on the heads of remodeling firms.
More than half of the operating heads completed college (53%), with 12% earning an advanced degree. When asked how long they had been in the business, 65% said 20 years or more, 26% said 10 to 19 years; 6% had five to nine years experience; and 3% had two to four.
Overall, 96% of the remodeling firms are led by men, according to the survey results, and 4% by women.
|
