Qualified Remodeler Magazine

OCT 2015

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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Te goal to create a comprehensive forecast has been somewhat elusive. Several years ago, Kermit Baker and the team at Harvard's Remodeling Futures Steering Committee created the Leading Indicator of Remodeling Activity (LIR A), a reliable indicator of owner improve- ments. But now a well-respected analytics frm, John Burns Real Estate Consulting LLC, Irvine, Calif., has stepped in with a proprietary forecast of the industry; one that includes all repairs and rent- al improvements. It also forecasts disaster-related repairs. Te architect of the forecast, Burns Vice President Todd Tomalak, says the work of cre- ating the forecast "was not easy." Tomalak explains his frm relied heavily on American Housing Survey data, which is also exten- sively used by Harvard, to create the new model. Tis was com - plicated by the many changes to AHS data collection that occur from report to report. So they normalized historical AHS data and created a proprietary model that also draws from other sources, including data from companies that purchase homes to rent, apartment owner surveys, and Burns' in-house price modeling data. Tomalak sees the new forecast as a more complete look at the market, and one that allows for deeper analysis of factors afecting the industry. ven before the Census Department in 2008 discontinued its quarterly survey of resi - dential remodeling activity, the c50 report, the remodeling industry sufered from a lack of good data and certainly a lack of a comprehensive forecast. Te 40-plus-year-old c50 report is thought to have dramatically undercounted remodeling activity, but its methodology was consistent, providing key directional sig- nals for the overall market. Many, including the leadership at Harvard University's Joint Center for Housing Studies along with a host of building product manufacturers, lobbied the gov- ernment to keep the report, with some ofering to chip in to foot its $1 million annual cost. Today only a quarter of what was once tracked quarterly — owner improvements — can be ascertained from other data sets. Te loss of survey data on all repairs and improvements of residential rental properties has been total except for num- bers reported in the biennial American Housing Survey. Today, repair and remodeling activity exceeds new construction, and indications are this might be the new normal. Tus the demand for more and better data about R&R; has grown. EXCLUSIVE A New Forecast for Remodeling Activity A private analytics frm, John Burns Real Estate Consulting, recently released a bold new forecast for the remodeling market — up 7.8 percent in 2016. The new analysis is a welcome addition to an industry short on projectable data. By Patrick O'Toole, Editorial Director / Publisher E Today, repair and remodeling activity exceeds new construction, and indications are this might be the new normal. SPECIAL REPORT: Industry Research 20 October 2015 QR QualifiedRemodeler.com

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