Home Remodeling & Repair Survey

Craig Smith
CEO ServiceMagic

2009 will be remembered by a vast number of people as a year of economic struggle. Even though we officially came out of an intense recession, rebuilding our economy and its vital industries is clearly going to take time. Some industries will bounce back faster than others. Based on what our data, homeowners and contractors are telling us, we expect the remodeling industry to take huge strides toward recovery in 2010.

The fourth quarter of 2009 capped a curious year for home improvement. Early in the year, larger projects were down and smaller projects were up as many homeowners began to invest in projects for themselves instead of a future owner. By Q3, we saw more people returning to discretionary spending on services such as house cleaning. ServiceMagic, which has continued to grow its homeowner base throughout the recession, received 47% more requests for service in Q4 ’09 vs. Q4 ’08. That’s an incredible increase that can be attributed to a number of factors, but mostly the resiliency of the homeowner.

The astonishing growth in our Q4 service requests, combined with other indicators, leads us to believe that 2010 will see a strong rebound in home remodeling projects. Pent-up demand throughout the recession combined with the possibility that the best contractors are more available plus a better macro-economic picture are indicators that 2010 will look much different for remodeling than 2009. However, we do expect that actual spending levels will follow general consumer trends. Activity is up, but consumers are more budget conscious and have less access to credit.

Additionally, our consumer sentiment survey shows that 44% of the respondents are more confident in the stability of their home equity than they were just six months ago. Only 11% are less confident. Clearly, homeowners are becoming optimistic once again and will provide the remodeling industry with the spark it needs to begin returning to its former luster in 2010.

Best regards,
Craig Smith