HomeTrend Forecast
Important Trends, Relevant news, Useful Tools and Interesting Facts
about the World of Housewares and Home Goods Marketing
From A.J. Riedel, Sr. Partner, Riedel Marketing Group

IMPORTANT TREND

ARE CONSUMERS CUTTING BACK ON HOME IMPROVEMENT EXPENDITURES?

The news about the housing market has been pretty gloomy lately. On August 28, Standard & Poor’s announced that the second quarter decline in U.S. home prices was the steepest rate of decline since S & P began its nationwide housing index in 1987. A day earlier the National Association of Realtors announced that sales of existing homes dropped for a fifth straight month on July while the number of unsold homes shot up to a record level.

The home improvement industry has certainly taken a hit. Home Depot posted a 1.8% decrease in sales from the second quarter of fiscal 2006 with comparable store sales declining by 5.2%. Although Lowe’s sales gained 5.8% for the second quarter of fiscal 2007, comparable store sales declined 2.6% in the quarter and 4.4% in the first half. Home Depot blames the “challenging housing market”. Lowe’s blames home improvement consumers who “are very reluctant to undertake the major projects they might have done in anticipation of selling.”

Consumers aren’t nearly as reluctant to undertake major home improvement projects as Lowe’s would like you to believe. In fact, a recent survey of Riedel Marketing Group’s proprietary HomeTrend Influentials Panel reveals that only 37% of HomeTrend Influentials (HIPsters) are at all reluctant to undertake major home improvement projects. Only 36% of HIPsters report that they are putting off home improvement or remodeling projects that they had been planning to do this year.