While new home construction remains at a standstill, many lighting showroom owners are hoping a large percentage of sales will come from homeowners who are remodeling their existing homes rather than buying new ones.
But according to a recently released report from the Joint Center for Housing Studies of Harvard University, home remodeling will also slow down dramatically in 2009.
Known as the Leading Indicator of Remodeling Activity, the quarterly report tracks how much homeowners spend on property improvement. In the most recent report, which was released Jan. 22, home improvement spending was projected to decline at an annual rate of 12.1 percent by the third quarter of 2009.
“Uncertainty in the housing market continues to stifle spending on homeowner improvements,” says Nicolas P. Retsinas, Director of the Joint Center for Housing Studies.
According to the report, Americans are expected to spend $109.6 billion on home improvements in the third quarter of 2009, down from $113.2 billion in the second quarter of 2009.
In fact, home remodeling spending has seen steady declines since the middle of 2007, according to the report.
“While we may be nearing the bottom of the remodeling cycle, there is little to push spending back into a growth phase until the economy recovers,” explains Kermit Baker, Director of the Remodeling Future Program of the Joint Center.
Mary Busey Harris, Executive Vice President of the National Association of the Remodeling Industry, says part of the decline in home improvement spending comes from the fact that homeowners are no longer sure what their home is worth, making it hard to determine the value of spending money to remodel parts of the home.
“When people are questioning the value of their home … and the status of their investments are in decline, they’re a lot more cautious,” Harris says.
Harris says remodeling hasn’t stopped, but it’s become more scaled down.
“Our members are saying, ‘We’re not doing the $1 million makeovers,” she says.
As the existing housing stock continues to age, however, Harris says many homeowners will be forced to make repairs, and that can be good for remodelers.
“You just can’t ignore a leaky roof or windows that are leaking and in need of replacement,” Harris says.
Although homeowners may opt to spend less on a major remodeling project now than they did a few years ago, lighting is still often a significant part of most remodeling projects.
And some lighting designers say now is the perfect time to convince homeowners that a small change in lighting can make a dramatic change in a room, even if the homeowner doesn’t spend money to change anything else.
“Many people don’t realize how much the application of light will change the colors and shapes in a room,” says David Berman, director of training for the Home Theater Specialists of America, a national association of electronics experts who design and install lighting, audio, video and other high-end systems. “The secret is to work with what you already have. For example, lower the light level in a room to enhance the detail in a marble countertop, make the pattern in a Persian rug pop and give the illusion of a new coat of paint.”
Larry Bem, a lighting expert with HTSA, suggests that homeowners install light control systems to create a dramatic effect, while at the same time saving money on energy.
“Installing a dimmer is one of the most impressive and cost effective ways to use light,” Bem says. “If you’re looking for the most bang for your buck, this is it.”