Washington, D.C. The Home Improvement Research Institute (HIRI) held its spring conference in Washington, D.C., April 3, and most panel experts agreed that the housing market will continue its decline through the rest of the year before showing some modest signs of recovery in 2009.
“The housing market has not hit bottom yet,” said James Gillula, managing director of U.S. Government Consulting, Global Insight, whose presentation examined the state of the housing market and its implications for home improvement sales. “Clearly we’re looking at historic lows in total housing starts. The housing decline will be an even larger drag on the economy in 2008 than in 2007.”
Deborah Weinswig, managing director of retailing/broadlines for Citi Investment Research, said 2008 will remain challenging, as home inventory remains high, housing prices continue to be pressured, credit availability remains uncertain and overall concerns about the economy continue to inhibit spending in the home improvement sector.
“I don’t know if we will ever get back to the kind of spending we saw in home improvement products during the housing bubble,” said Weinswig, who follows Home Depot, Lowe’s and other home improvement retailers. “Instead of a consumer going out and buying a new washer or dryer, they’re going to try to fix the one they have. Instead of buying a whole new kitchen, they’ll resurface the cabinets.”
Kermit Baker, director of the remodeling futures program at the Joint Center for Housing Studies at Harvard University, spoke about the fragmentation of the remodeling industry -- with the top 50 players representing just 5.2 percent of the total market. He said remodelers can do better in these difficult economic times by becoming specialized in a certain area of home improvement. “It’s very difficult for remodeling contractors to go toe-to-toe with suppliers,” he said. “You look like a bigger player if you’re servicing a niche.”
Attendee Karen Wilson, corporate marketing officer for Hyde Tools, said over the next several months she will take the information from the conference and apply it to product development, marketing, strategic planning and in sales presentations to buyers. “HIRI has a lot of aggregated and useful data for anyone in the home improvement industry,” she said. “You never know when a driving trend will become important in your segment.”