Home improvement in a new economy: windows and doors
December 30, 2011
The upside of an economic downturn is that you may be able to get a good deal on your next home improvement, including replacement windows and doors.
Current trends in home remodeling
The money homeowners spend on remodeling was expected to drop by 4-percent, during the first quarter of 2010, according to a report from Harvard University's Joint Center for Housing Studies. The National Association of Home Builders (NAHB) reported the same decline, with market conditions down for major home additions, maintenance and repair. The NAHB also predicted that home improvement projects would remain slow into the foreseeable future, as fewer homeowners are asking for project bids or estimates on new work.
Eric S. Belskey, Managing Director of Harvard's Joint Center pointed out the biggest problem: "Falling consumer confidence levels have undermined interest in discretionary remodeling projects."
Windows and doors: prices and ROI
Advancements in energy efficiency have led to slightly higher price points in recent years, but homeowners seem to have no problem with that trend. A 2008 article from Quality Remodeler magazine found that homeowners looking for new windows were especially interested in energy efficiency, low maintenance and environmentally friendly products, even if they cost a bit more.
Homeowners still want a good return on investment, however; and ROI has declined in recent years. For instance, in 2002, an upscale window replacement cost a national average of $15,502 with a return of 77-percent on investment at resale. In 2010, that same window replacement cost an average of $18,226, yet only returned almost 68-percent on investment. This 10-percent decline in ROI occured in just one decade, when resale value peaked at a return of almost 89 percent in 2005.
Doors have seen the same trends, but there are some standouts, like steel entry. In 2010 the national average cost of a steel entry door was $1,172 with an impressive return on investment of 129 percent. In 2011, the cost had increased slightly to $1,218 with a lower recoup of 102 percent.
A June 2011 report from NAHB found that the purchase of vinyl windows had risen sharply during the last several years, while the purchase of more expensive wood had seen a slight decline. Entry doors of fiberglass are increasingly popular, but cheap and strong steel ones remained a favorite.
Today's homeowners want higher quality products at cheaper prices. They are also staying in place longer, which means more remodeling but less new construction. The industry is responding with higher quality products, more efficient construction processes, better interaction with suppliers and new marketing strategies that focus on value.