NAHB: Home remodeling down in fourth quarter
Remodeling activity decreased in the fourth quarter to a Remodeling Market Index (RMI) score of 40.9 from 46.2 in the previous quarter, according to the National Association of Home Builders (NAHB). The future expectations measure also fell — to 37.9 from 43.3 in the previous quarter.
The NAHB attributed the declines “to pressure from the housing downturn.” However, the group noted, “While housing starts have fallen sharply from the peak in early 2006, the remodeling market has shown a much smaller decline.”
The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers view the market conditions as improving. The RMI has been running slightly below 50 since the final quarter of 2005.
“While the housing downturn has impacted the remodeling market to some degree, it is on a much smaller scale than the rest of the market,” said NAHB Remodelers chairman Mike Nagel. “Homeowners realize the importance of maintaining their property and making necessary repairs to support the value of their homes, so we expect this type of work to start to pick up again.”
Nationally, the RMI components for major additions and alterations during the fourth quarter declined to 42.28 (from 46.89). Minor additions and alterations also decreased to 41.76 (from 47.07), except for an increase in the South to 49.81 (from 43.68). Maintenance and repair remodeling work declined to 38.11 in the fourth quarter (from 44.31).
Research firm points to garage as opportunity
Port Washington, N.Y.-based NPD Group pointed to garage storage as a home improvement category somewhat immune to the housing downturn, as well as an opportunity for home improvement retailers.
“Garage storage is somewhat immune to the current housing market downturn,” said Mark Delaney, director of NPD Group’s Home division. “It’s not like the kitchen category. Consumers who plan on redoing their garage are doing so, regardless of what the housing market is doing.”
Some of the garage storage findings from NPD Group include:
• Warehouse home centers took the lion’s share of dollars at 47 percent in the garage and storage sector. Mass merchants followed at 32 percent and department stores at 5 percent.
• The garage storage segment attracts mostly high-income male shoppers.
• During the 12 months ending October 2007, men accounted for 64 percent of the dollar share in the garage storage and organization sector.
NPD Research is based on monthly tracking of 30,000 opt-in respondents in 70 categories.
“Areas ‘outside’ the home are getting more attention and are benefiting from the trend in making visual statements out of previously simple spaces. Garage storage is one of those areas that has evolved from simple products like bike racks and tool hooks into a race to build the ultimate ‘man cave’ complete with refrigerators and flat-screen TVs,” said Delaney.
While women account for only 36 percent of the dollar share in the garage storage and organization sector, “NPD consumer research shows that women mainly shop for home improvement items within mass merchants, where items generally sell for less. Women might become a bigger piece of the pie if mass merchants begin to carry more aspirational items or if department stores and warehouse clubs adjust their marketing efforts to appeal better to women,” said Delaney.
“Garage storage is an up-and-coming category that seems somewhat recession-proof. Retailers looking to attract a higher income consumer should consider expanding their assortment in this area,” added Delaney.
ProBuild acquires Jasper Lumber
ProBuild Holdings has finalized its acquisition of Jasper Lumber, a North Atlanta-based lumber, truss and millwork business. Terms of the deal were not disclosed
The purchase includes Jasper Lumber’s Cumming, Ga.-based lumber distribution business and its Kennesaw, Ga.-based lumberyard, truss and millwork manufacturing facility.
“Jasper Lumber is an outstanding, well-run operation,” said Jim Cavanaugh, ProBuild South region president, in a statement. “This acquisition, along with the previously announced acquisition of HD Supply’s LBM operation, positions us well to serve all segments of the Atlanta market.”
Jasper Lumber was founded in 1947 in Jasper, Ga., and it relocated in 1963 to the suburbs of Atlanta. It has been operated by second- and third-generation owners Bill Adams and his son, Keith.
ProBuild Holdings is one of the nation’s largest supplier of building materials to professional contractors, with more than 520 lumber and building product distribution, manufacturing and assembly centers in 41 states.