NEW YORK – The U.S. housing market is starting to thaw, but it could be two years before a full-blown recovery takes hold, Home Depot Inc Chief Executive Frank Blake said on Thursday.
The world's largest home improvement retailer has seen the benefits of the nascent U.S. housing recovery as professional contractors have started buying more in recent months.
"It's starting to recover, but we're a long way away from true recovery," Blake told Reuters in a wide-ranging interview.
He said Home Depot, which recently closed its stores in China, plans to concentrate on building its Internet business rather than overseas expansion.
"The way we look at it is there's going to be a period of a workout, a fine period of one to two years and then you're going to get a more robust recovery," Blake said.
Credit availability and the overhang of distressed housing are among the reasons the housing market can't "just spring back" to where it was before the recession, Blake said.
While California and Florida, states slammed by the housing downturn, show signs of improvement, Blake urged investors not to read too much into the recent signs of recovery.
"We've had head fakes on the housing market coming back, so you always worry that this is a little bit of a head fake," Blake said.
Last month, Blake decided to close all seven of Home Depot's big box stores in China after a failed expansion attempt there. He said he views online business as the next area of expansion, rather than new geographic markets.
"Home Depot can afford not to be in Brazil. Home Depot can afford not to be in, name your country. Home Depot cannot afford not to be the best, what we call, inter-connected retailer in our space," said Blake.
Blake said the retailer was interested in making more acquisitions in Silicon Valley in order to boost its online business and other related capabilities. (Additional reporting by Phil Wahba and Brad Dorfman; Editing by David Gregorio)