A nationwide survey of remodelers finds them slightly more likely to predict robust growth in 2014 and 2013, Hanley Wood announced Sept. 25. Here's one possible reason why: The parent company of REMODELING also forecast the number of "pro worthy" remodeling projects nationwide will rise 7% next year to 11.6 million.
Forty-five percent of the remodelers polled said they expect revenue will grow more than 10% in 2014, according to survey results, announced in Chicago on the first day of Hanley Wood's Foundations Conference. In contrast, 41% forecast such increases topping 10% for 2013 when Hanley Wood conducted a similar survey last year. Both last year and this, another 20% of remodelers predicted revenue gains between zero and 10%.There was a one-point rise in the share of remodelers predicting no change in revenue--it's 24% for 2014--and a one-point drop, to 4%, in the share expecting a decline of zero to 10%.
The most noticeable change of all was in the group predicting revenue declines of at least 10%. Last year, 11% forecast such a downfall for 2013. In this year's survey, only 4% were as gloomy about their prospects in 2014.
The poll also revealed a slight shift toward kitchens in terms of opportunities. Last year, 56% of remodelers identified that part of the home, but this year 61% did. Meanwhile, last year's No. 1 prospect--bathrooms, at 61%--slipped three points in the latest poll to 58%. All other categories of opportunity remained unchanged: repair and maintenance (58%), major replacements (36%), minor replacements (32%), small additions (34%), and decks and porches (29%).
Jonathan Smoke, chief economist for Hanley Wood's Metrostudy data unit, credited 2014's expected 7% rise in pro-worthy projects (generally, jobs worth at least $500) in part to an increase in overall housing activity, because research shows that a hefty percentage of people who move into a just-acquired home are likely to remodel it within the first three months. Thus, when housing starts and existing home sales rise, remodeling does, too.
But Smoke also cited another factor for remodelers: aging baby boomers. That group is more likely to hire remodelers for projects and more likely to seek big-ticket work, past research for Hanley Wood has found. So when that cohort grows, remodeling prospects will as well, and population data suggests that households aged 55 and above will account for 29% of all homes in 2018, up from 26% in 2013.
Metrostudy predicted outlays for remodeling plus repair and maintenance projects will climb 7.8% in 2014 to reach $242.96 billion.-- Webb is editor-in-chief of REMODELING. Follow him on Twitter at @craiglwebb, and follow REMODELING at @remodelingmag.