Shopping Centers Today is the news magazine of the International Council of Shopping Centers (ICSC)
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S E P T E M B E R 2 0 1 7 / S C T 27 Office • Industrial • Retail • Multi-family • Land Commercial Development • Hospitality ©2017 RE/MAX, LLC. Each office is independently owned and operated. 17_165400 Tired of being treated like an account? At RE/MAX Commercial,® we don't take your business for granted. Work with a Practitioner who has the full authority to help you achieve your goals and delivers on what's promised. Don't let them fool you: you're not a number. One-on-one service. That's the Sign of an Agent with RE/MAX Commercial TURN TIDE TURN TURN remaxcommercial.com quarter to $324 billion in next year's second quarter, according to Harvard University's Joint Center for Housing Studies. Home renovation spending increased by 57 percent over this past year, according to HomeAdvisor.com. It is the large chains that are seeing the lion's share of the growth, Menear says. "Hardware store sales are showing to be much smaller," he said. "They experienced estimated growth of 1.2 percent in 2016." Barring a major downturn, the housing inventory crunch may last long. "Certainly a challenge that's ex- acerbating the situation is the reality that most homebuilders are unable to produce new for-sale housing much under $200,000," said Ted Wilson, president of Dallas-based Residential Strategies. In North Texas, one of the hottest U.S. housing markets, listings for homes under $200,000 have shrunk from about 25,000 six years ago to roughly 5,000 today, he says. "The price of land, labor and materials has inflated such that $200,000 is the new threshold for entry into the new- home market." In another plus for the industry, homeowners do not view home-im- provement spending as being discre- tionary, as they do with most noncom- modity retail — instead, it is viewed more as an investment, according to research firm Retail Metrics. About two-thirds of U.S. homes are considered "older" and require more upkeep, the firm says. But the home-improvement indus- try, though online-resistant, is not on- line-proof, and the 4 to 6 percent gains are not sustainable after the present run, argues Menear. Consumers and professional remodelers alike "are in- creasingly turning to online purchases," he said. "While it's not to the extent seen in other industries, it's growing, and growing quite rapidly." Home Depot and Lowe's have been striving to make online purchases easier "and they have shown very strong online sales growth numbers in recent years," Menear said. That effort is translating to more physical-store visits, with about 45 percent of the orders placed at Ho- medepot.com being picked up in-store, Menear says. Shares of Home Depot and Lowe's jumped about 2 percent in the hours after published reports about the home-renovation trend this week. This was a welcome relief after the announcement that Sears would sell its Kenmore-branded appliances on Amazon.com resulted in cumulative market-cap losses of some $12.5 billion for Home Depot, Lowe's, Best Buy and Whirlpool. n