2006 Ad

Business Wire, May 11, 2006

LAS VEGAS -- The Home Improvement Research Institute (HIRI), one of the nation's foremost authorities on trends and economic forecasting for the home improvement industry, announced the findings today on a recent proprietary study on America's housing industry at a press conference at the 2006 National Hardware Show in Las Vegas.

Buyers of new and existing homes have a disproportionately large impact on the home improvement market. This proprietary study, which was conducted in March 2006, examines the behavior of approximately 600 recent purchasers of new homes and 600 purchasers of existing homes in terms of what home improvement projects they are undertaking, what motivates these activities, where they buy the products needed to complete these projects and where they go to get information on these projects.

"The first step in capturing a significant portion of this lucrative market segment is to fully understand the customer," said Fred Miller, Managing Director of HIRI. "With the data from this study, retailers, manufacturers and service providers will have much better insight on how to effectively market to these very important homeowners. Clearly, those that do the best job of serving this market will be very successful. The results we presented are very current and highly relevant to your everyday consumer."

Key findings include:

The Recent Homebuyer

--  Recent homebuyers are an important segment of the home improvement
    market

--  The motivation to move concentrates on:
    --  Wanting to own a home of their own (renters)
    --  Relocation due to a new job
    --  Upgrade to a larger home
    --  Growing segment - downsizing

--  Recent Movers Account for Higher Average Spending Levels -
    Homeowners that have lived in their home for 0-2 years spend an
    average of $2,300 yearly on their home, 3-5 years spend an average
    of $2000 annually, more than ten years spend $1700 annually

--  Main reasons for moving include to own and live in own house (22
    percent 2006, 27 percent 2004), current home too small (16
    percent, 19 percent 2004) and new job in different location (18
    percent 2004, 2006)

Home Projects

--  On Average, Cost For Home Projects = $2,576

--  "House Appeal" is the leading motivator for doing home projects

--  66 percent of new homeowners do at least one project to their new
    home

--  57 percent of respondents plan to do at least one project in the
    next year or two
    --  Landscaping is top with buyers of new homes followed by
        deck/patio
    --  Kitchen, bath & landscaping are key areas for improvement by
        buyers of existing homes

--  Almost half of those who sell their old home do projects to ready
    it for sale
    --  61 percent done prior to listing with another 24 percent after
        listing but pre offer
    --  12 percent after an offer is made (up significantly from 2004)
    --  Kitchens, Baths & Bedrooms are most popular
    --  Painting and Flooring are the major activities
    --  Primary goal is to increase the sales appeal of the house

--  DIY is the most common way projects are done but with some key
    differences
    --  A directional shift to contractors for work on the previous
        home
    --  Buyers of new homes are more likely to use a pro for work on
        their current home
    --  Growth overall in use of pros on their current home
    --  The motivation to hire a pro focuses on the size of the job,
        and making sure the project comes out right

New Versus Existing Homes

--  People Who Buy New Homes:
    --  Want everything new
    --  Perceived better value
    --  Ability to customize to their desires
    --  Growth in "Existing homes didn't have what we wanted"

--  Existing Homes Are Selected Because:
    --  Perceived better value - but down significantly as a reason
        from 2004
    --  Like the neighborhood
    --  Better selection
    --  Growth in "Prefer style"

Key Demographics

--  Men lead in initiating projects for a home being sold, while women
    dropped to #2

--  Women still have a lead in initiating projects for the current
    home, but have shifted more to joint initiation

--  Women lead in initiating planning for future projects as men's
    role declined and more decisions are joint

This is the second time HIRI has conducted this study over a two-year timeframe. The original study results were released at the 2004 National Hardware Show. New HIRI studies are normally only available to members of the organization, but registered exhibitors and attendees at the 2006 National Hardware Show in Las Vegas have access to the findings of the study. HIRI also conducted seminars as part of the show's Industry Conferences for the Home Marketplace(TM) to help retailers, buyers and manufacturers evaluate the findings and apply them to their respective businesses.

"We are thrilled to have the Home Improvement Research Institute conduct this landmark study as a part of our show," said Rob Cappiello, industry vice president for the National Hardware Show. "Manufacturers, retailers and buyers need this kind of information to make smart decisions about their businesses, and they can only get it at the National Hardware Show in Las Vegas."