Kermit Baker, senior research fellow at the Joint Center for Housing Studies at HarvardRemodeling Leadership Conference on May 6.
Market on the Mend
Baker described 2015 as a year in which "spending exceeds its pre-recessionary high.” The remodeling market has almost fully recovered from the economic downturn, he said.
Generations to Watch
Currently, the baby boomers are still heavily involved in the market, but this will start to shift in the coming years. Gen-X members are approaching their prime spending years, ages 35-55, and will be a major driver of the market going forward. However, Baker points out that “future growth in the industry will depend on how well millenials get engaged in the housing market in the years ahead.”
“The industry continues to be extremely fragmented, probably the most fragmented industry of our economy,” Baker said.
Labor availability will be a big issue going forward in construction and home improvement. There is a need for younger workers and more women to join the industry.
New Niche Markets
Future opportunities for growth will be different. “It’s not likely to be those $150,000 kitchen remodels or $80,000 bathroom remodels that really sustained this industry 10 years ago," Baker said. "I think it’s going to be a different set of projects.” These new projects come from more niche markets, such as aging in place and sustainable home improvements.
Overall, the outlook is positive for remodelers. Growth through the industry is expected to accelerate going into the fourth quarter and Baker predicts this will continue into 2016.
May 14 update:
Hanley Wood has created this infographic from JCHS data showing how remodeling spending has changed over the years.