March 2012 Overview

Distribution

Big-box Retailers Not Just for DIYers

Contractors make nearly half of their tool and building supply purchases from big-box retailers, according to a national research study conducted by Syracuse, N.Y.-based Eric Mower + Associates.

According to the research, 46 percent of contractors purchase hand tools, 47 percent purchase power tools and 49 percent purchase accessories from big-box retailers; 42 percent, 35 percent and 36 percent purchase hand tools, power tools and accessories from distributors, respectively.

Contractors perceived big-box retailers to have a better variety of products, lower pricing and greater convenience as a one-stop shop, according to the study. Of the respondents, 63 percent would prefer to make small-volume purchases at big-box retailers.

Those who prefer purchasing through distributors said it was for their customer service (75 percent), relationships (70 percent), knowledge (63 percent) and delivery (54 percent), all of which ranked significantly higher when compared to retailers. Distributors were also ranked high for carrying pro tools, shipping directly to the contractor site and offering credit arrangements.

Leading Indicator

Glimmers of Hope for Remodeling in 2012

After a slow start, home-improvement spending is expected to trend up later this year, according to the Leading Indicator of Remodeling Activity released by the Remodeling Futures Program at the Joint Center for Housing Studies (JCHS) of Harvard University, Cambridge, Mass. If this momentum continues to build during the second half of the year, remodeling activity is on course to end 2012 on a positive note, according to JCHS.

"Sales of existing homes have been increasing in recent months, offering more opportunities for home improvement projects," says Kermit Baker, director of the Remodeling Futures Program. "As lending institutions become less fearful of the real-estate sector, financing will become more readily available to owners looking to undertake remodeling."

NAHB

Moore Is New NHAB Remodelers Chair

George "Geep" Moore, CGR, CAPS, GMR, and owner/president of Elm Grove, La.-based Moore-Built Construction & Restoration Inc., was appointed the 2012 chairman of the National Association of Home Builders Remodelers (NAHBR) during the International Builders' Show in Orlando, Fla. He is a past president of the Louisiana Home Builders Association and Northwest Louisiana Home Builders Association and served as chairman of the Louisiana Remodelers Council. Currently, Moore serves on the board of directors of the National Association of Home Builders and served six years on the NAHB Remodelers board of trustees. Vice chair is Bill Shaw, CGR, CGB, CAPS, William Shaw and Associates, Houston; second vice chair is Paul Sullivan, CGR, CAPS, The Sullivan Co. Inc., Newton, Mass.; and NAHBR's past chair is Bob Peterson, CGR, CAPS, CGP, Associates in Building & Design Ltd., Fort Collins, Colo.

Green

Green Remodeling Growing Quickly

One-third (34 percent) of remodelers expect to be doing mostly green work by 2016, a 150 percent increase compared with 2011 activity levels, according to New York-based McGraw-Hill Construction, a part of The McGraw-Hill Cos. Green homes, which comprised 17 percent of the overall residential construction market in 2011, are expected to grow to between 29 percent and 38 percent of the market by 2016. By value, this equates to a five-fold increase, growing from $17 billion in 2011 to $87 to $114 billion in 2016, based on the five-year forecast for overall residential construction.

House Price Index

House Prices Fall Moderately

U.S. house prices fell slightly in the fourth quarter of 2011, according to the Washington, D.C.-based Federal Housing Finance Agency's seasonally adjusted purchase-only house-price index (HPI). The HPI, calculated using home-sales-price information from Fannie Mae and Freddie Mac-acquired mortgages, was 0.1 percent lower on a seasonally adjusted basis in the fourth quarter than in the third quarter. On an unadjusted basis, prices fell 1.1 percent during the quarter. During the past year, seasonally adjusted prices fell 2.4 percent from fourth quarter 2010 to fourth quarter 2011.