I just finished reading ServiceMagic’s Home Remodeling Survey, covering the first 6 months of 2011. It confirmed what we – and many of you – have seen so far this year: softness in the market with a few bright spots.
I take away both good news and bad news from this survey. Leading with the positive, homeowners still want energy-efficient and savings-related home improvements. Specifically, solar installations are gaining popularity, and were tagged as the most popular remodeling category so far in 2011.
We can confirm that trend, as we’ve seen our lead generation campaigns for solar dealers perform well. In contrast to replacement windows, homeowners can still find enticing tax rebates for solar products.
We have seen many dealers flood into the solar field of late, and their message of energy-efficiency and long-term cost savings rings a bell with consumers. However, we suspect many of these dealers – particularly the local and regional dealers – would be struggling to sell their products without the tax incentives. For the moment, the math in the solar business makes sense to consumers. Let’s hope it stays that way.
Also proving popular are energy efficiency improvements. Specifically, HVAC and window shades are outperforming other verticals. Keeping heat out and cool in with new energy efficient AC systems is proving popular with homeowners.
What’s the bad news? Major home improvement categories such as roofing, siding and windows continue to be weak. That’s not to say that those jobs have disappeared, but they have certainly slowed since 2010. ServiceMagic argues that the pent up demand that led to gains in 2010 is now gone, and the remodeling industry is back to hand-to-hand combat when it comes to driving leads in those categories. I’d agree with that.
We also suspect that the end of the $1,500 tax credit for replacement windows had a direct and immediate effect on the entire category.
At Keyword Connects, we’re also seeing a preference for lower-priced improvements. Credit markets still haven’t bounced back, and so homeowners are more serious than ever about projects that don’t cost in the five figures or require a loan. $3,000 – $5,000 seems to be a sweet spot for homeowners right now.