Demographic, housing trends point toward a boom in kitchen remodeling
The storm clouds from the housing bust are starting to reveal a silver lining for kitchen cabinet refacing companies and other remodelers: A Harvard University study predicts remodeling activity will grow quickly as Baby Boomers sell their homes and downsize.
It’s no secret that the housing collapse created hardship in the construction industry. As equity disappeared and credit markets tightened, money for new construction almost completely vanished. Although new construction suffered, remodeling work held tight — dropping from $326 billion in 2007 to $286 billion in 2009 before rebounding back to about $300 billion in 2010, according to Harvard University’s Joint Center for Housing Studies.
The research institute singled out specialty contracting firms like Kitchen Solvers for their ability to navigate even the worst of the recession, thanks to streamlined operations, focus and efficiency.
Now that the economy is recovering and people are feeling more secure about their paychecks, remodeling is accelerating.
The Harvard Institute’s Leading Indicator of Remodeling Activity projects remodeling spending to grow 5.9 percent in 2012 — and it’s not expected to be a short-term trend. The researchers expect home improvement spending to climb 3.5 percent a year through 2015.
About 25 percent of remodeling dollars are spent on kitchen and baths, the report states. That’s out of total remodeling spending of about $300 billion a year, according to “A New Decade of Growth for Remodeling,” another report by the Joint Center for Housing Studies.
So the market for kitchen and bath remodeling in the U.S. sits at $75 billion a year — and growing.
Even that lofty number may understate the potential for remodeling firms. The Harvard Institute looked at the main drivers of remodeling activity, and one fact stood out: As people hit retirement age, they often downsize, selling homes that haven’t been upgraded in decades to younger buyers who are eager to improve their new homes.
The result: A flurry of remodeling activity.
Baby Boomers are just beginning to retire en masse. If Boomers behave the way that new retirees have behaved for the past decade, they will be unloading massive amounts of property — much of it in need of remodeling.
“There is a huge generational bulge of people who have owned their homes for decades,” Kitchen Solvers president and CEO Gerry Henley said. “Some of them will remodel their homes in order to continue living in them long into retirement, but many more will sell to younger buyers eager to have a kitchen that suits their needs.”
That newfound thriftiness is an opportunity for Kitchen Solvers, which pioneered solid-wood kitchen cabinet refacing. The process can transform the look of a kitchen without all of the mess and expense of a full remodel.
“By offering quality refacing as well as full remodels, and by offering new cabinets at a variety of price points, we can deliver an outstanding kitchen to people, regardless of budget,” Henley said.
Kitchen Solvers has remodeled more than 45,000 kitchens since the company was founded in 1982. The company pioneered high-end cabinet refacing and also installs new cabinets and redesigns kitchen layouts.Back