Inside the minds of wealthy Americans
A survey of affluent households in the United States indicates that almost half are cutting back on both their remodeling plans and their holiday gift giving because of uncertainty over the economy.
More than four in 10 affluent Americans (41%) — defined as those who have a minimum net worth of $800,000 — are making a conscious effort to spend less in the coming year than they did in the prior year, according to the American Affluence Research Center in Alpharetta, Ga. Two-thirds (65%) reported wanting to save more money so they plan to spend less, and 60% said they have experienced a decline in savings or investments. The primary reason they gave in the survey for cutting back was uncertainty about when the economy will recover.
When asked about renovation plans, one in 12 affluent households (8%) said they will remodel their kitchen in the coming two years, and 16% are only considering a kitchen remodel. Those who are definitely planning a remodel expect to spend an average of $35,000, and those who are on the fence assume they would spend an average of $28,000. Respondents said they would hire a kitchen design specialist to help them source most purchases, and they cite dHome Depot more often than Lowe’s as a store they would shop, according to the results.
More than one in 10 (11%) surveyed planned to remodel a bathroom in the coming two years, with 19% only considering a bathroom remodel. Those who are definitely planning a remodel expect to spend an average of $15,000, and those who are unsure if they will remodel assume they would spend an average of $11,000. Those planning a bathroom remodel most commonly said they would hire design specialists, followed by shopping Home Depot and then Lowe’s for items needed for their remodel.
On the subject of gift giving, about 12% of respondents said would not buy Christmas or Hanukah presents in 2010, up from 9% in 2009 and compared with 3% who said so prior to the recession. Among those who plan to buy gifts, 3% expect to spend more and 29% expect to spend less. In 2009, their average spending was $2,399, and their median spending was $1,160.
The survey also indicated that affluent shoppers are rather tech savvy. Approximately 76% said they have used a mobile device to compare prices, and 21% have used such a device to look up product information while shopping in a store.
In soft October, builders concerned over financing
Nationwide housing starts declined 11.7% to a seasonally adjusted annual rate of 519,000 units in October, according to figures released by the U.S. Commerce Department today. The decline was primarily registered in the more volatile multi-family sector, where starts retreated 43.5% to an 83,000-unit rate, while single-family starts posted a more modest 1.1% decline to 436,000 units.
“Home builders continue to be very cautious about starting new projects at this time,” said Bob Jones, chairman of the National Association of Home Builders (NAHB) and a home builder from Bloomfield Hills, Mich. “That said, in markets where consumer demand for new homes is reviving, builders are finding it almost impossible to obtain construction financing, and this frustrating situation is producing an unnecessary drag on both new-home production and economic growth.”
“October single-family starts and permitting activity remained essentially in line with the third quarter’s trend,” noted NAHB chief economist David Crowe. “What this tells us is that the market is running at a steady, but slow rate following the downturn that took place upon expiration of the home buyer tax credit program and the economic slowdown this summer. Today, builders are just starting to report some improvement in buyer demand, which should gradually translate into more sales activity, and more starts, as the economy strengthens. The great concern is that this positive momentum will be stifled due to builders’ inability to obtain financing for new construction at a time when inventories of completed new homes are very thin.”
OSHA outlines Black Friday precautions
The Occupational Safety and Health Administration (OSHA) has encouraged the CEOs of 14 major retailers to look at their crowd-control measures to avoid out-of-control crowd-related injuries during so-called “Black Friday,” the unofficial start of the holiday shopping season.
The guidelines include:
• Set up barricades or rope lines for crowd management well in advance of customers arriving at the store. • Move shopping carts and other potential obstacles away from the entrance. • During the sales event, make sure that all employees and crowd-control personnel are aware that the doors are about to open.