Homeowners tell Zillow they’re remodeling, but where are they buying the paint?
Apparently not at Home Depot. The store posted a 24 percent decline in fiscal second-quarter net income, according to The Wall Street Journal.
But according to Zillow’s Q2 Homeowner Confidence Survey, which we released earlier this month, more than half of respondents are planning to do some sort of remodeling in the near future. Fifty-six percent said they were planning some kind of home improvement, either major or minor, in the next six months.
About half of all the respondents (49 percent) said they were going to do minor repairs, like repaint a room or install a garbage disposal. About a fifth (17 percent) said they were going to do major improvements, like replacing the roof or a kitchen remodel. FYI, some people said they are doing both major and minor repairs.
This is the first time we’ve asked this question of homeowners, so we don’t know if the numbers are going up or down. We’ll know more next quarter, when we ask it again.
My hunch is that the number of people planning some kind of home improvement is staying fairly steady. But I think there have probably been changes in the scope of these improvements.
Back in 2005 and 2006 when homes values were going up up up, it wasn’t hard to secure a home equity line of credit, or HELOC, and put in those new granite counter tops and stainless steel appliances. But it was also much easier to sell your home and move to a bigger and better one down the block.
These days, though, if people don’t need to sell, a lot of them aren’t. Even though our Homeowner Confidence Survey showed that most people aren’t exactly in touch with reality when it comes to the value of their homes, it’s no secret that it’s not as easy to unload your house as it once was. So maybe people are nesting, and since it’s not as easy to dig into the equity of their homes (some recent calculations here at Zillow showed that one in seven American homeowners is underwater on their mortgage), maybe they’re making more minor home improvements.
So maybe homeowners are buying their paint at Home Depot, but not as many new kitchen cabinets or hardwood flooring. We’ll find out more next quarter, when we have more data to compare, but what do you think?
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