Qualified Remodeler helps independent remodeling firms to survive, become more professional and more profitable by providing must-have business information, namely best business practices, new product information and timely design ideas.
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at a massive biennial tome — Te American Housing Survey, which contains no forward-looking information. Tat is why, in this report, you will see fgures seemingly at odds with one another. Te most recent American Housing Survey (AHS) shows that repairs and improvements to all homes was nearly $300 billion in 2013. At the same time, the most recent LIR A, (Te Leading Indicator for Remodeling Activity), created by Harvard's Joint Center for Housing Studies partly in response to the defunding of Census data, is set against a much lower aggregate amount of activity, $142 billion. Tat second fgure, $142 billion, while more current, only ofers homeowner improvements, leaving out three other pieces of the pie — homeowner repairs, rental unit improvements and rental unit re- pairs — which is now only available every two years when the AHS is compiled. Such is the byzantine and fuzzy state of remodeling industry data and forecasting. Until Harvard's Remodeling Futures Steering Committee (part of the Joint Center for Housing Studies) developed its LIR A, re- modeling indicators were inferred from a handful of data points that remain a useful starting point today. Tose indicators are: home price appreciation, existing-home sales and average age of the housing stock. As prices increase, so too does homeowner equity, which enables owners to spend more on repairs and discretionary upgrades. Because people tend to repair before they move and improve when they buy a home, higher existing-home sales (the highest ever, 7 million units, was recorded in the mid-2000s) equates to higher remodeling activity. And fnally, when existing homes age, they need more main- tenance, repairs and upgrades. Today each of these indicators presages generally positive conditions for remodeling going forward. Case Shiller's Home Price Index shows that U.S. home prices are growing at a 4.3 percent annual clip while prices overall sit at their highest levels since 2007, according to the National Association of Realtors. Te median age of a U.S. home is 39 years, according to the most recent AHS. Finally, existing-home sales are trending upward at an annualized pace of more than 5 million units per year. All are at solid levels vs. historical norms. Tese fgures are big underlying reasons why Harvard's most recent LIR A, released Jan. 15, projects 6.2 percent annualized growth in remod- eling during the frst quarter of 2015. Going forward into the second, Qualified Remodeler readers, across all segments, said that they plan to invest more in generating repeat and referral business. They also plan to spend more on marketing. Interestingly, Internet and Internet-related marketing options seem to be high on the most and least effective marketing tools lists. Remodelers' Marketing Plans Will your marketing budget be higher or lower in 2015? What was your MOST effective marketing source last year? What was your LEAST effective marketing source last year? Referrals Repeat business Internet marketing Other Social media Home shows Radio advertising Magazines Company signage (yard signs, truck lettering) Direct mail Billboards Canvassing Newspapers Yellow Pages Television Yellow Pages Newspapers Direct mail Internet marketing Magazines Social media Home shows Company signage (yard signs, truck lettering) Radio advertising Other Referrals Television Canvassing Repeat business Billboards 39.4% 23.6% 16.5% 6.3% 3.9% 3.2% 1.6% 1.6% 1.6% 0.8% 0.8% 0.8% 0.0% 0.0% 0.0% 16.5% 14.2% 8.7% 7.9% 7.9% 7.1% 6.3% 6.3% 5.5% 5.5% 4.7% 3.9% 3.1% 1.6% 0.8% 72% Higher 28% Lower Source: Qualified Remodeler Forecast Survey, 2015. PROFITS: Remodeling Market Forecast 2015 34 February 2015 QR QualifiedRemodeler.com | ForResidentialPros.com