Home Renovation and the Economy

September 14, 2009 by  
Filed under Economics

Mrs. ToughMoneyLove and I visited the Home Renovation and Remodeling Show at the Nashville Convention Center this past week-end. We were looking for ideas and potential vendors for some home upgrade/remodeling projects we are considering.

It turns out that one can get a good idea of how the economy is doing at the small business level from visiting a home remodeling show and speaking to those working the booths. Most of the vendors at these shows are small businesses, either the independent mom-and-pop type or a franchise operation.

Some random observations:

1.  There were more kitchen and bath makeover vendors than any other variety. By “makeover vendors” I mean businesses that want to re-face (not replace) your cabinets or that will resurface tubs, showers, and counters. These represent a frugal kitchen/bath remodeling strategy compared to the more traditional “tear it out and start over” technique.

2.  There were more discount flooring companies represented than flooring manufacturers. In our area, Buy Floors Direct and Lumber Liquidators are known for selling hardwood, cork, bamboo and laminate flooring at discount prices. Both of these vendors had a large presence at the show. Typically you would also see large displays by the flooring manufacturers themselves or at least by more traditional flooring retailers. Not this year. It’s all about the discounts now.

3.  The contractors are desperate for business. There were many local building contractors and remodelers represented at the show. I spoke to a few about a project we need done at our lake house in Kentucky which is 90-120 miles away for these vendors. All of them told me that while in the past they wouldn’t travel that far, in this economy they would be happy to get the work.

4. Upgrading for energy savings could be huge. There were at least three different vendors offering solar water-heating systems and grid-connected solar-electric systems. We are fans of solar-water heating. We owned such a system years ago when the TVA was offering significant purchase credits. It worked great and saved us a lot of money. You just have to accept the look of solar panels on your roof. This approach is less attractive to us now because we are almost empty-nesters with substantially reduced hot water usage.

The grid connected solar-electric systems are also intriguing, mostly because the TVA has committed (for ten years) to purchase excess power from homeowners at a premium rate. Even with this and energy tax credits, the payback would be 10-15 years at least. They need to bring the dollar-per-watt cost of the hardware down before these systems will become popular. This is one area where stimulus dollars could have been put to better use.

5.  The hucksters are still out there. The folks from Sham-Wow, waterless cookware, etc. are still popular at these shows. People were lined up listening intently to the high energy sales pitches. Never mind the economy – we all need to spend hundreds of dollars for new pans, knives, and juicers, don’t we? I felt like I should be standing near the microphoned spokespersons with signs that asked: “What about your retirement?” or “Is your car paid-for?”

Overall, it was an informative experience at the remodeling show. Mrs. ToughMoneyLove entered us in lots of drawings for free-stuff. That means we will be receiving numerous telephone solicitations in the days ahead. Willpower will be important.

Photo credit: Young’un

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4 Responses to “Home Renovation and the Economy”
  1. MasterPo says:

    Don’t get me started on solar power…

  2. Rick Beagle says:

    “This is one area where stimulus dollars could have been put to better use.”

    Your hypocrisy is amazing, but I do agree with this statement.

  3. My Journey says:

    Did you get the old line, that the upgrade will pay four-fold when you sell?

  4. MasterPo says:

    MJ – And don’t forget that you will get back your $40,000 to $50,000 investment in energy savings! (over the next 20 years of course)


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