The HOUZZ & HOME Overview of U.S. Renovation in 2016 and 2017 is a comprehensive 46-page report that is a must-read for all design professionals. Whether you’re a contractor, interior designer, architect or remodeler, the report presents salient facts about what HOUZZ found when it surveyed 106,778 respondents in the U.S., representing the activity of the more than 40 million monthly unique Houzz users. In fact, HOUZZ claims that this report is “the largest survey of residential remodeling, building, and decorating activity conducted.”
Regardless of whether or not this is true, professionals will find thoughtful insights in the report. Some ideas may bring up more questions on how people consume content in this age of disruption and what it really means to the design professional in such an age. You are encouraged to download and study the report for yourself, but here are some observations to get you thinking.
- Homeowners on Houzz spent, on average, $60.4K on 2016 renovations, in line with $59.8K in 2015 according to this research. But, that’s a little different than what Home Advisor In their TrueCost 2017 report, they report that homeowners spent an average of $5,157 on home projects within the last 12 months — representing an increase of $1,869 over the previous 12 months. Unlike the HOUZZ report, the True Cost Report is based on an online survey conducted by HomeAdvisor’s internal research team among 500 homeowners, ages 25 or older, from February 1-7, 2017. There are still other reports like the Joint Center for Housing Studies of Harvard University that say something different, including: homeowners younger than 35 spent an average $8,702 on their individual projects in 2015… 35–44 spent $10,294…45–54 spent $10,553 and 55–64 people spent $11,207. Regardless which report you believe, so what? Once you know what people spend on remodeling, does that mean anything to your marketing efforts? Should it? This kind of information is what we call “nice to know” information, but not essential to a designer’s marketing. After all, the idea is to stimulate and motivate people to spend money on your designs, isn’t it? I know designers who perform well above these averages – and well below.
Like all research, you have to consume it and relate it your reality. And for the designer, the question is really: what is the average spend within your own customer file? Having that number is worth more to you than what these averages are, because your average spend is the baseline against which you should evaluate every new project you consider.
- In 2017, according to the HOUZZ report, homeowners plan to spend $27.3K on renovations, which is 4% higher than the prior study. This can’t be true, especially since a couple of slides before that, the report said on average, homeowners are spending $60.4K. See what I mean about “nice to know,” but “so what?” Examining research carefully helps all of us understand what numbers really mean and what they don’t mean.
- The HOUZZ study says that Millennials invest the least in renovation. They invested 7% over the prior year, as an age group, but they are just not putting money into the renovations. Is that surprising based on what you know about this demographic? Also, a first time home buyer is less likely to renovate than a repeat home buyer or a long-term home buyer. Is that matching what your own experience says?
- According to the HOUZZ survey, “homeowners have a strong preference for customizing their homes.” Over 80% of first time buyers want to customize their new home. But, doesn’t customization mean renovation? Didn’t the report just say that first time buyers are less likely to renovate? Digesting research carefully is essential if you are going to incorporate it into your marketing strategy!
- Kitchens, bathrooms and living rooms are the top priorities for interior renovations according to HOUZZ. Remarkably, the HOUZZ survey also says that spending on laundry rooms grew more than home offices, guest bedrooms, dining rooms and closets.
- Home automation and security upgrades increased in popularity. HOUZZ says first time and repeat home buyers are twice as likely to install home automation.
While this is all “nice to know,” one of the real tells in this research was a statistic about repeat buyers who renovate with the help of an architect or designer. This is an important question, because HOUZZ is one of the richest platforms on the web with design ideas. In fact, one can argue that the designs from the design professionals is really the reason 40 million or more people visit that platform each month.
According to HOUZZ, 23% of repeat home buyers renovate with the help of a professional. My first question was, what about the other 77%? Do they “do it yourself?”
More important, however, is the chart they use to demonstrate this point (on page 34 of the report). The chart shows only 5% of the HOUZZ homeowner audience use a kitchen or bath designer. And, only 6% use an architect, and only 8% an interior designer. What’s going on here? At first, it simply didn’t make sense: a quarter of the audience is hiring a professional. But when you examine the chart, it became crystal clear, and actually, a client called attention to it: while few are hiring designers, 27% are using a general contractor! The audience is gobbling up the designs and then going to a contractor to help them build what they see!
No one doubts the inspiration of HOUZZ content. Yet, it is the nature of content and the internet to be “available” to everyone and to be used by everyone. Designers are givers – they share their ideas, designs. But, if only 5% to 8% of their target audience are using them – and that’s 2-million people if you look at the traffic on HOUZZ – it’s still a very small portion of people who have renovation work – isn’t it? What’s a professional to do?
Here are a few ideas.
- Keep using HOUZZ. This is one of the most heavily travelled websites full of design ideas. But, don’t put everything on HOUZZ. Designers should use their websites – their unique places where they can have people come and explore their ideas. Therefore, use HOUZZ to push people to your website where you can interface with them directly.
- Partner with contractors. Become a one-stop shop. When you design, find contractors you can work with to execute your work, and sell your clients the complete package. Don’t limit yourself to design only.
- Use SEO on YOUR website to your advantage. When you Google things like “award winning bathroom designs” or words like that, HOUZZ is always in the top organic results. Why? Because of you! Designers give HOUZZ such rankings because they populate HOUZZ with their content. Do the same on your website! For example, the minute I add “in Phoenix” into a search as described, showrooms and designers start showing up on the first page of Google! HOUZZ will always be there, but you can be there too! It’s all about content!
And if you need even more research, try these useful references:
- A handy tool for looking into your pricing for remodeling and renovation work is Remodeling Magazine’s cost vs. value report. It is easy to navigate, and in a few clicks, you can get information on pricing in your area for remodels.
- The Demographic Change and Remodeling Outlook, a 40-page research report published by the Joint Center for Housing Studies of Harvard University is another resource. Remember that remodeling activity varies widely. New York, San Francisco, Denver, Boston, and Washington, DC were the nation’s five top-ranked remodeling markets, with improvement spending averaging almost $4,900 per homeowner.