Good News for Kitchen Cabinet Refacing Companies: Harvard Institute Notes Big Uptick in Remodeling Activity
Harvard institute reports surge in remodeling activity as recovery, demographics kick in
Kitchen cabinet refacing and kitchen remodeling franchise Kitchen Solvers saw this coming. For the past year, we’ve been encouraging interior designers, woodworkers, handymen and others interested in starting a business to take a long look at the remodeling industry, because our research indicated that it was poised for a boom.
Now the data is in. The Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University says that the annual growth in remodeling spending, which has been increasing at 2-3% since the end of 2011, rocketed upward at a rate of 8.2% in the 3rd quarter of 2012. The institute’s Leading Indicator of Remodeling Activity (LIRA) projects spending growth to hit 10.6% for the first three months of 2013, 16.8% in the second quarter, and 19.7% by September.
“Through the first three quarters of 2012, investment in the residential sector was responsible for one out of every six dollars added to our GDP,” says Eric Belsky, managing director of the Joint Center. “Moving forward, home improvement is expected to make an even larger contribution to GDP growth.”
Why kitchen cabinet refacing is a good business
Kitchen cabinet refacing is a good business for a couple of reasons:
One, kitchens are one of the most popular remodeling projects in a home because they can transform the look of a house and have one of the highest returns on investment.
Second, cabinet refacing can drastically lower the cost of a kitchen remodel. The process transforms the look of a kitchen in just a few days while reducing waste. Cabinet refacing gives well-built old cabinets a major facelift — doors and drawer fronts, hinges and handles are removed, and the exposed cabinet face-frame is refaced with a factory finished and stained furniture-grade plywood. New cabinet doors and drawer fronts, self-closing hinges, and decorative handles are installed to complete the project.
By driving down the cost of some remodels, kitchen cabinet refacing appeals to homeowners who developed thrifty habits in the wake of the recession.
Why remodeling businesses are poised to grow
The Joint Center expects the growth of the remodeling industry to continue for a decade or more and cites three main trends:
• The housing recovery: Home prices are rising again in much of the country, and and low interest rates are attracting new buyers and making it easier for existing homeowners to use loans to tackle home improvement projects. To quote the Joint Center’s report on housing stock, “Ready for Renewal”: “Renewal of the nation’s housing stock is getting underway. … the future market potential is immense.” Why is the center do bullish?
• Retiring Baby Boomers: Retiring Baby Boomers are freshening up their homes one last time ahead of retirement — and remodeling spending by people age 55 and over was 20% higher in 2011 than it was a decade ago, the Joint Center says, even after adjusting for inflation. The first Boomers turned 65 in 2011, and the last boomer will hit 65 in 2029.
• The Echo Boom: As the economy improves, the largest generation in America’s history — the children of the Baby Boomers — will begin buying and remodeling more homes. Between 2005 and 2011, the number of households that included at least one adult children increased by 15%, the Joint Center reports, as young adults stayed in the nest because of unemployment or underemployment. The Echo Boom is currently between the age of 9 and 30. By the time the last Baby Boomers have retired, the Echo Boom will be driving a new swell of demand for housing and remodeling.
Interested in starting a business in a growing industry?
To learn more, check www.kitchensolversfranhcise.com to read our research pages and learn how much it costs to start a Kitchen Solvers franchise, and to read Kitchen Solvers franchise reviews on our blog. To start a conversation, fill out this form to download our free franchise information report or give us a call at 866-604-0002.Back