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26 August 2012

Style Trumps Profit 2 to 1 for Homeowners Nationwide [Survey]

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Even as new and existing home sales and prices climb, homeowners are prioritizing lifestyle over ROI, according to a recent Houzz & Home Survey conducted among users of the Houzz app and website. Houzz is a visual and social platform for home design and remodeling, with more than seven million unique users of the site and iPad app each month, 89{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c} of which are homeowners.

The survey of nearly 30,000 Houzz users nationwide found that homeowner priorities when it comes to remodeling and decorating are focused on improving their own quality of life rather than how to turn a profit from the next buyer.

Among homeowners planning to build, remodel or decorate in the next two years, 86 percent cited “improving the look and feel of the space” as an important driver for remodeling projects, while only 47 percent cited ”increasing home value.” The gap between these priorities was consistent across all income levels and demographic groups.

In the next two years, 72 percent of homeowners surveyed plan to decorate or redecorate, 40 percent plan to remodel or construct an addition, 15 percent plan to purchase and move into a new home, while another 10 percent are planning to build a custom home.

Custom homes are particularly popular in the Southern U.S. Top cities for custom home builds are Jackson, Mississippi where 21 percent of homeowners surveyed are building the home of their dreams from scratch, and Houston, TX and Little Rock, AR, which both reported 18 percent of homeowners planning to build new.

Home Projects and Budgets

Kitchens and bathrooms are the most popular remodeling projects among Houzz users, with 48 percent of respondents planning a bathroom remodel, and 45 percent redoing a kitchen in the next two years. Midwesterners have the highest budgets for kitchen and bath remodels at $30,500 and $13,600 respectively, while the South is allocating the least at $23,800 and $11,600.

57 percent of Houzz homeowners planning to complete a project in the next two years will hire a general contractor, 35 percent a kitchen or bath professional and 32 percent will hire a carpet or flooring professional.  Thirty percent are planning to hire an architect, 26 percent an interior designer and 24 percent a landscape architect or designer.

About half — 52 percent — say they will save money by completing some projects themselves.

In fact, even upscale homeowners are taking a hands-on approach to building, remodeling and decorating projects. The survey found that while 45 percent of homeowners at upper income levels ($150,000+) are choosing to hire an architect, interior designer, general contractor or another remodeling or decorating professional to complete a project in its entirety, an equal number of them are combining professional help and DIY efforts, a proportion only slightly smaller than the 49 percent taking this combination approach in lower income brackets.

In this economy, prioritizing livability over return on investment may seem like an irrational approach, but people today are looking at their homes as a long-term sanctuary, not a quick flip. This new rationale is also reflected in homeowners’ approach to financing.  When asked if they are planning to take a line of credit to fund their remodeling projects, 70 percent of today’s homeowners say “no way.”

They’d rather cut back elsewhere or do some of the work themselves.

Design Ideas and Advice

The study also found that 68{0a8e414e4f0423ce9f97e7209435b0fa449e6cffaf599cce0c556757c159a30c} of homeowners get their primary ideas and advice online when it comes to home design. Visual and social tools are empowering them to better communicate their vision for their home to everyone involved in the process, from their real estate agent to their architect, designer or builder.

These trends – a long-term outlook and reliance on information found online – explain why real estate professionals are turning to visual technologies and tools like Houzz to show clients the potential or vision for a home. Most people simply can’t imagine a home transformation, and need pictures to help them understand.

In fact, at Real Estate Connect last month, the Inman team presented their research on the “Agent of Tomorrow,” noting that across the board agents surveyed expressed a desire for digital communication and technical tools, and that the agents grossing the most income were already doing business that way.

Realtors in particular are using Houzz ideabooks, which are essentially online folders of photos and notes, as a CRM tool for existing and prospective clients. As one realtor noted, “If a clients tells me she’s pregnant, I create an ideabook on Houzz of nurseries. If a client is downsizing from the suburbs to the city, I create an ideabook to show him ideas for how to create a home office in a small space.”

How are your clients designing their dream home?

 

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