Moving Out and Sprucing Up
-35 Million Americans plan to move this year
-Seller confidence increases 36%
-72% plan to spend an average of $4,000 on home improvements
NEW YORK, --Americans are on the move, according to the latest American Express Spending & Saving Tracker. Fifteen percent of Americans, or approximately 35 million people, expect to move in 2013, a 50% increase from last year. Of these, 43% plan to purchase a new home, condo or apartment, while 47% will rent. Moving or not, the vast majority (72%) of Americans have at least one home improvement project on their to-do list this year, expecting to spend an average of $4,000.
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A Seller’s Market
Overall, homeowners are more optimistic about the real estate market, with 57% feeling confident they could sell their home for their asking price today, a 36% increase from 2012.
Nearly half of consumers (45%) think the best time to buy is within the next six months. To speed up the process, most homeowners (70%) say they’re willing to make certain concessions to sweeten the home buying deal, a trend that’s increased 13% since 2011. Concessions include: throwing in appliances (46%), making requested repairs (32%) as well as paying closing costs (18%, up 64% since 2011).
Before concessions can be agreed upon, sellers will woo potential buyers by putting their house’s “best foot” forward. The most important fixes and upgrades according to consumers include: making small repairs, like leaky faucets and damaged plaster (69%), organizing and de-cluttering (66%), painting (63%), improving landscaping (49%), updating of bathrooms (33%), replacing out-of-date appliances (24%) and hiring professionals to stage or clean (23%).
Not everyone is packing up and moving; 25% of Americans are looking to take advantage of low interest rates to re-finance. Among them, 38% will use their refinancing savings to pay down debt and bills, 23% will put the extra cash in a piggy bank and 12% will put the money towards home improvement projects.
House Call: Upgrades Add Value
Whether selling or staying put, consumers say they’ll spend an average of 14% more on home improvement projects this year than last. Seventy-two percent of Americans, on par with last year, will spend an average of $4,000 on fixing and sprucing up their homes.
“Consumers are investing in their homes this year across nearly every category from DIY to new home furnishings,” said David Rabkin, SVP U.S. Consumer Lending Products, American Express. “Whether they’re redoing one room or the whole house, there is a significant bump in spending that should bode well for many merchants.”
Homeowners plan to spend an average of $4,000 this year, up from $3,500 in 2012:
-62% have plans to purchase new home accessories or furniture
-63% are remodeling their interiors, spending an average of $3,300
-39% are remodeling outdoors or landscaping, spending an average of $1,800
-39% are re-doing a single room, spending an average of $2,900, and
-33% are updating their appliances, spending an average of $1,033
While many believe the improvements will add to the value of their home (30%) the majority is upgrading because they want a home that better reflects their personal styles (33%).
When it comes to style inspiration, social media is increasingly popular, with 14% turning to social sites like Pinterest, a two-fold increase from last year. Traditional broadcast television including DIY and design shows is down slightly (39% from 43%) as a source for inspiration, while magazines (29%) remained a steady resource for consumers.
The Green House Effect
Between 2011 and 2013, the amount of Americans spending on sustainable renovations has increased 53%. Of those “greening” their homes, 29% will upgrade to more energy-efficient windows and doors, 19% will spend it on insulation, 18% on heating, ventilation and/or cooling, while 12% will implement an alternative energy system (e.g. solar power or geothermal heat pump).
When asked for their primary reason to make such upgrades, 31% hope to see a return on investment in energy savings, 19% an overall improvement on the value of their homes, 15% are making an effort to reduce their carbon footprint, and 14% are motivated by government tax credits and incentives, which will extend into 2013.
The American Express Spending & Saving Tracker research was completed online among a random sample of 1,518 adults, including the general U.S. population, an affluent demographic, defined by a minimum annual household income of $100,000, and homeowners . Interviewing was conducted by Echo Research between February 27 and March 1, 2013. These findings have a margin of error of ± 2.5 (total respondents) and ± 3.0 (homeowners) percentage points at the 95% level of confidence.
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