over the last several decades, the American economy has
grown an average of 3.3 percent annually. e data, adds
Tomalak, suggests that for every one point of GDP below
that 3.3 percent there is a small pivot away from big proj-
ects (those defined as over $5,000 in spending). us, in
our slow growth recovery, small projects have led the way.
"e category that still has the most room to run is the
owner-occupied, big-project remodel," he says. "at is the
one that has gained the least ground over the last few years."
is year will be different: Owner big-project remodels
are forecast to be up 8 percent in 2016, 6 percent in each
of the next two years before slowing to 3.6 percent growth
in 2019. Given the headwinds facing mobility and existing
home sales, the number of Nesters is set to grow, which
favors growth in the rate of projects like siding and windows.
ough Nesters embark on kitchens and baths less often
than Recent Movers, "they spend a lot more when they do, a
likely outcome of a desire to trade up," Tomalak says. "Pro-
driven remodels will definitely benefit, and DIY will suffer."
LATE IN THE CYCLE
e year 2019 is projected to be a "reset" year according to
the Burns forecast. e rationale for this relates to where
Continued
2007 2008 2009 2010 2011 2012 2013 2014 2015E 2016P 2017P 2018P 2019P
$250
$200
$150
$100
$50
$0
30%
20%
10%
0%
-10%
-20%
Billions
$USD
%
Growth
Year-over-year
Burns Residential Repair and Remodel Spending: Owner Occupied Remodels
■ Owner Big Projects ■ Owner Small Projects ■ Owner Disaster Repairs % Growth Year-over-year
Sources: John Burns Real Estate Consulting LLC; FEMA (Data: Feb-16; Pub Jul-16)
Owner remodeling is set to grow 30 percent by 2019, driven by large gains in big project spending in 2016-2017 and small projects
in 2018-2019 (up 8 percent and 6 percent, respectively).
2014 increase from 18
percent in small-project
maintenance spending, driven
by deferred repair projects
from prior years.
Remodel Spending Mix 2007 to 2016
■ Owner Small Ticket ■ Owner Big Ticket
■ Rental Big Ticket ■ Rental Small Ticket
■ Disaster Repair
Source: U.S. Census; John Burns Real Estate Consulting, LLC; National Apartment Association;
Harvard's Joint Center for Housing Studies (Data: Aug-16, Pub: Aug-16)
Since 2007, big owner projects have stagnated due to declines in owner count and lack
of home equity withdrawal. In the same period, rental households have grown rapidly.
2007
4%
5%
44%
32%
15%
2016P
4%
6%
20%
46%
24%
SPECIAL REPORT: Industry Forecast
32 October 2016 QR QualifiedRemodeler.com