Remodeling activity remained steady in the fourth quarter of 2006, according to the National Association of Home Builders’ Remodeling Market Index. The current market conditions index edged up slightly from 47.8 to 48.2 on a seasonally adjusted basis and future expectations moved up to 46.0 from 45.4. The RMI measures remodeler perceptions of market demand for current and future remodeling projects.
“Remodeling retained strength across most of the country compared to late last year,” said Mike Nagel, CGR, CAPS, NAHB Remodelers Chairman, from Chicago. “Certainly regional economies and housing markets play an important role, but overall we see high levels of remodeling activity and solid prospects.”
The RMI component for the rental market indicated a strong increase in activity for that sector in the fourth quarter of 2006. The current conditions index for renter-occupied markets increased from 38.8 to 44.1, while current conditions in owner-occupied units decreased from 51.4 to 49.7. The future expectations for the renter-occupied units also grew from 37.1 to 42.4, and owner-occupied units edged up from 45.0 to 45.6.
“Though the substantial reductions in home sales and new housing production have impacted the remodeling market to some degree, we feel that remodeling of both owner-occupied and rental housing will remain strong compared to other areas of the industry,” said NAHB chief economist, Dave Seiders. “With record levels of homeowner equity and the constant need to upgrade the older housing stock, the remodeling outlook appears quite good for years to come.”
Regionally, the South reported the most growth as current conditions increased to 52.8 and future expectations moved up to 51.1. The current conditions in the West grew to 52.4 but future expectations fell to 51.3. In the Northeast, current conditions moved down to 45.7 while future expectations increased to 50.1. Only the Midwest showed declines in both indexes, with current conditions decreasing to 44.4 and future expectations lowering to 35.7.
The RMI “special questions” section asked about subcontracting. Approximately one-third of a remodeling company’s work by dollar volume was subcontracted out. The median value for a general contractor’s subcontracted work in 2006 was $289,500 (with an average of $572,323), compared to the total median dollar volume of $848,214 for general contractors last year. Only 17 percent of remodelers surveyed reported acting as a subcontractor for other firms. Among all remodelers, only 2 percent of their dollar receipts came from work as subcontractors.
New NARI LeaderHome Depot Exec., Gordon, passes leadership to Tom Hagner
John Gordon, president-elect of the National Association of the Remodeling Industry, announced his resignation late last month.
Second in command of the Pro-Sales Division of The Home Depot, Gordon cited the company’s necessity to have 100 percent of his time focused on current and new job responsibilities.
Current NARI vice president Tom Hagner, CRS, of Better Building by Weather-Seal Ltd., Racine, Wis., assumed the presidency March 24 at NARI’s Spring Board of Directors Meeting held in Austin, Texas.
The NARI Executive Committee supported a succession plan whereby current officers progress and were elected by the board to the next highest office.
The NARI nominating committee reconvened and prepared a new slate of candidates, including office of secretary. The secretary will ultimately ascends to the presidency after serving as treasurer and vice president.
Full Service RemodelingCase Design & Remodeling takes a ‘retail’ approach
For years, airlines and hotel chains have awarded their most loyal customers with discount flights, free rooms and cash-back incentives aimed at retaining customers. Now Case Design & Remodeling is doing the same.
Last month, Case introduced its loyalty program to past clients. Each client earns “Case Dollars” based on a percentage of the total cost of their last project. A percentage of the dollars then can be used on their next home improvement or remodeling project. The dollars are flexible and can also be given to family members and friends.
“From credit cards to car rentals, the average consumer participates in a variety of loyalty programs,” says Case CEO Mark Richardson, CR. “So they are savvy enough to recognize the major savings. In our industry, this will differentiate the really good companies from the rest of the pack.”