The home improvement boom is far from finished, but it’s changing.
Rather than embarking on DIY adventures, homeowners are increasingly tapping pros for big projects.
Experts say that with a tight housing market the spending spree is unlikely to end anytime soon.
As many Millennials are wont to do when embarking on a project for the first time, Alex Strunce and Hayley Swanson turn to YouTube.
But when it comes to renovations on the mid-century ranch house the couple bought this summer in Madison, Wisconsin, things are not always as easy as they seem on the internet.
“It’s like a three-minute video and I’m sitting there like 45 minutes later, and I’m like, ‘I don’t know what I’m doing,'” Strunce said.
Strunce and Swanson told Insider they consider themselves extremely capable DIYers, even as their foray into homeownership tests those limits.
“Our first gamble was with the kitchen cabinets,” Swanson said. “Even just taking off the doors takes an hour, and then you get to sanding and you’re like, ‘Oh my God, this is actually physical work!'”
A month after they started working on the cabinets, the doors are still not hung, and the couple still has a whole spreadsheet of other projects waiting in the queue.
“Now we’re getting a little bit more smart with understanding where we want to put our time,” Swanson said.
That means a little less DIY and a little more PRO.
‘An investment and not an expense’
Home improvement retailers are seeing the same thing happen across the US, as homeowners pull back spending on their own projects and increasingly hire contractors to do it for them.
“Take a category like paint,” Todd Decker, Home Depot’s president and COO, said on an earnings call this month. “Painting is one of the initial home improvement projects that a customer engages in and starts to build confidence in home improvement.”
He continued: “Millennials are engaged in housing. They’re engaging in home improvement. They’ve done that first project, which is painting and some gardening work generally. We’re just thrilled that they’re engaged in the category and moving on to bigger projects.”
It turns out that bucket of paint last year was a gateway drug to harder stuff, like refinishing the floor or updating the backsplash, which is best done by a pro.
Lowe’s quarterly financials told the same story: a falloff in the DIY segment was more than offset by an increase in big-ticket purchases and pro-sales.
“It will take years for the supply of homes to meet the projected demand,” CEO Marvin Ellison told investors. “As long as their home is increasing in value, [homeowners] see upgrades and enhancements to their home as an investment and not an expense.”
Such a robust housing market will continue to benefit Home Depot and Lowe’s, Barclays analyst Karen Short told Insider.
Because of the low availability of houses and the aging housing stock, more people are embarking on home improvement projects to spruce up the less-than-ideal houses they’ve bought, an environment in which the two home improvement giants thrive, she said.
“I don’t think the strength is ending any time soon,” she said. “That could change, but I don’t anticipate that could happen because there’s such a significant shortage of housing stock in general.”
That shortage means the home improvement boom could endure into 2022, even as the effects of the pandemic lessen. People who can’t, or choose not to, move right now may view improvements as an investment in their homes’ values.
“Owners lack the opportunity to move to a different house. There’s also been a strong appreciation of the value of existing homes,” Paul Emrath, vice president for survey and housing policy research at the National Association of Home Builders, told Insider. “So that provides a motivation for homeowners to remodel as an investment. And it also provides a source of equity that they can tap into.”
‘We know our limitations now’
The pandemic has also shown that millennials are willing to follow the same patterns as baby boomers by buying homes and renovating their homes themselves to match personal tastes and needs, Barclays’ Short, said.
“There’s more sustainability to DIY than people realize,” she said. “But some things in housing are not DIY and you have to have a pro involved. It’s not that one dies off – I think it ebbs and flows.”
That’s especially true for those without specialized skills. Courtney Lee, a project success guide at The Home Improvement Group in Northwest Indiana, said her business is “slammed” with remodeling projects for kitchens, bathrooms, decks, and home offices. She said they’ve also encountered plenty of homeowners unhappy with the progress they’ve made on Youtube-inspired DIY projects.
“We certainly see people that start projects and then they want us to come in and fix what they’ve started,” she told Insider. “They need a little help cleaning up.”
The backlog of remodeling projects for the average home remodeler has risen since the first quarter of 2021 and has skyrocketed by 80% since the first quarter of 2020, according to a survey by the National Association of Homebuilders.
And a labor shortage in construction isn’t helping the bottleneck.
“I’ll get 40 resumes and I can’t get one person to call me back,” Lee said, adding that high demand has meant certain supplies and appliances can take months to come in, including bathtubs, cabinets, and shower parts.
Back in Wisconsin, Strunce and Swanson have had their plans similarly stymied by shortages. Some specialty hinges are on backorder, and an electrician just pushed his earliest availability back to October.
“We know our limitations now that we’ve actually started doing projects,” Swanson said. “We know what we want to get a contractor for, but we’re not prioritizing that yet.”
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