Looks like those weekly trips to Home Depot could start making a comeback.
With home prices rising across the country, sinking money into renovations no longer feels akin to flushing it down the toilet, which is making more homeowners confident about taking on home improvement projects large and small, according to new research.
More than half of homeowners think it's a good time to remodel, online home remodelling and design resource Houzz noted in its annual report, with "significantly more" homeowners moving forward with renovation projects this year compared to last.
Data from Sageworks, a financial information company, seems to confirm the trend. After tanking during the recession, building material and supply retailers like Home Depot have seen healthy gains, with sales increases of almost 8 percent in 2012 on top of a more than 4 percent gain in 2011.
Experts credit much of the improving attitude to a strengthening economy, a better labor market, and rising home prices, all of which have resulted in fewer homeowners relegating remodeling to the back burner. Those who said they were delaying home improvement projects because of the economy dropped from 52 percent to 45 percent over the past year according to the Houzz report, with homeowners reporting they were more likely to make cuts in other areas such as vacation instead of paring down their home renovation plans.
"People are seeing more opportunity to renovate," says Liza Hausman, vice president of community at Houzz. "They see they can get their money back on these investments, which is definitely a consideration."
And its not just changing paint colors and switching out cabinet hardware. Americans are taking on larger-scale projects as well, including kitchen overhauls and even additions. Kitchens and baths remained the most popular on the renovation to-do list, with almost 30 percent planning bathroom renovations and almost a quarter considering kitchen makeovers within the next two years. As usual, kitchen renovations gobbled up the lion's share of renovation budgets, commanding 4 in 10 home improvement dollars, with homeowners spending almost $30,000 on average to remodel a kitchen according to the report.
"People see kitchens, closets and bathrooms as part of the party—it's not a decoration," says Claudio Faria, owner of Brazil-based home furnishings retailer Ornare in Miami, Fla. "This isn't a chair or a table, it adds value to real estate, so much so that realtors are actually advertising" the upgrades.
But most homeowners won't go solo when it comes to tackling big reno projects—almost 60 percent plan to hire a general contractor to manage renovations, the Houzz report showed. Another 36 percent plan to hire a kitchen and bath specialist, 23 percent would employ an architect, and 22 percent would have an interior designer spiff up their new space.
In New York City where space is a premium, the potential for opening up closed-off spaces in cramped pre-War buildings is key, according to Eric Hantman, founder and CEO of Prime NYC, who says he and his clients pore over floor plans to see if walls and beams can be removed.
"We look for anything that can be opened up on the floor plan—can electric and plumbing be moved to open up the space?" Hantman says. "People want the open flow concept and they know that adds value and they'll recover that value."
Some renovations are not as easily discernible to the naked eye as a brand new kitchen but make a glaring statement on monthly utility bills. About 34 percent of homeowners said increasing energy efficiency was a main driver in home improvement projects, the report noted, with almost 20 percent looking to integrate new, more energy efficient technologies into their homes.
"The number is still a bit low but it's an indicator of what's to come regarding new technologies in the home," Houzz's Hausman says.