Survey: Homebuyers Spend $3,100 in First Year on I
Las Vegas, NV, May 12--On average, homebuyers spend $3,100 to improve a property within a year of moving into it, according to a study conducted by the nonprofit Home Improvement Research Institute and released this week at the National Hardware Show in Las Vegas.
Those who buy an existing home put only about $2,000 into it in the first 12 months. For buyers of new construction, that figure is $5,000, the study found. That's despite the fact that buyers of existing homes actually complete and plan more upgrade projects than their new-home counterparts.
"New-home buyers were more likely to hire contractors, which at least partially explains the higher average spending," said Rob Cappiello, industry vice president for the 2004 National Hardware Show.
Cappiello also noted that purchasers of newly-built homes had a higher average household income than those who purchased older homes, increasing the likelihood that they would purchase more high-priced products.
Purchasers of existing homes are more likely to paint interior spaces, replace or repair flooring, do electrical wiring and install new lights and appliances.
The reasons that new-home buyers spend so much more comes down to decorating and landscaping--things like bare windows and unplanted yards are more likely to need immediate attention in new homes than in existing residences. New-home buyers were also more likely to build patios or decks, the study found.
The study said that 52 percent of recent home buyers had completed one or more home improvements within the first year of purchase, and half were planning at least one more project within the next year.
Kitchens, bathrooms and living rooms are the most likely interior spaces to be improved in both newly-built and existing homes. The most frequently purchased products include paints and sundries, lumber and building materials, and floorcoverings.
Owners of older homes most frequently cited a desire or need to replace worn out or old materials, while owners of new construction were most often seeking to beautify the house
Purchases of both types of homes reported that they did improvements to support new features and change the decor.
By the time most buyers moved into their new address, they were already familiar with the remodeling drill: about 40 percent said they also made improvements to their previous home to get it ready to sell.
The most common improvements prior to sale are painting kitchens and bathrooms. One-third of those selling older homes made structural improvements to the exterior or interior of the house such as replacing or repairing roofs, windows or doors; repairing or replacing interior walls or ceilings; or converting a room to a different use.
Consumers selling homes were more likely to install carpeting and improve landscaping prior to sale. Overall, home sellers spent an average $3,000 to get their house in shape.
"The vast majority of homeowners said they believed that the money spent on improvements to their previous home was compensated by the increased value," said Fred Miller, HIRI managing director.
Most consumers said they used money from savings to pay for their recent projects. Those who purchased existing homes were more likely to use their savings than purchasers of newly-built homes, the study said.
Less than ten percent of home-buyers used credit cards to pay for improvements, and two percent said they used money from a loan or excess mortgage money.
Overall, contractors are involved in about one-third of projects done to newly-purchased homes and nearly half of the projects completed in previous homes prior to sale.
Homeowners most frequently used contractors who had done previous work for them, or who were recommended by family and friends, a finding that echoed previous research from HIRI.
About 10 percent of the projects included installers from home-improvement retailers such as Lowe's and Home Depot, which also were cited as the source for about three-quarters of materials purchases made by homeowners.
