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Home Depot's CFO reveals a changing psyche of homeowners

Home Depot's CFO Carol Tomé told Jim Cramer that every morning she gets up paranoid, ready to fight the competition. Especially when it comes to a rebounding housing market.

"As home prices appreciate, something happens with the home owner. They think of the home as an investment and not an expense, and they spend differently in their home," Tomé told the "Mad Money" host.

For most people, a home is the largest investment that they have. Thus, as home values increase, the homeowner feels like it is worth more and it encourages them to invest more, Tomé said. During the financial crisis, homeowners weren't interested in spending much, as stress from mortgage payments weighed them down. They would maintain their homes, but wouldn't invest, Tomé said.





"Addressable market in the US is $550 billion. Our market share is less than 20 percent … We just need to invest in the customer experience because the consumer is changing. We've got to invest in that experience, and we can grow sales," Tomé said.

While areas like Boston have fully recovered since the economic recession, areas in the Midwest, like Chicago, still have not recovered, according to Tomé.

Nevertheless, Home Depot still has managed to produce a strong quarter without opening any new stores. In the early days, Home Depot opened a new store every 48 hours. The company is now sufficiently stored, and is focused on driving existing real estate and productivity.

This includes being ready for the holiday season and Black Friday. Before 2006, Home Depot wasn't even in the holiday business. Tomé said the company entered the holiday business because it noticed that it sold more Christmas trees than any other retailer.

This year, Home Depot expects to sell 2.8 million live Christmas trees, and enough LED Christmas lights to circle the globe six-and-a-half million times.

"We leaned to it in a big way, and we are going to have a knockout black Friday," Tomé said.

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