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REMODELER SURVEY SERIES 2013 Remodeling Forecast: Looking Good Ever Hopeful, Survey Participants Believe Recovery is on the Horizon By Kenneth W. Betz R emodelers are an optimistic group by nature. How else can they routinely pull apart someone's home and expect to put it back together better than before? So it should come as no surprise when asked about the remodeling market for 2013, they're enthusiastic. Fifty percent of respondents to a recent Qualified Remodeler survey predict a good year, and 11 percent proclaim it will be excellent. Even those less positive (32 percent) say it will at least be fair. Only 6 percent anticipate a poor year. Virtually all the indicators, whether they are specific to remodeling, new residential construction, real estate or the economy in general, support this show of confidence — with the inevitable caveats, of course. In October 2012, the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University suggested a robust recovery of the remodeling market with double-digit growth in the first half of 2013. (The next LIRA report will be released on January 17.) Forecast on Track Kermit Baker, director of the Remodeling Futures Program at the Joint Center, says the forecast seems to be on track, noting that third-quarter data for 2012 is coming in stronger than projected. Originally, the iPad Mini Giveaway Forecast survey respondent Marty Shuter, Blake Design Build LLC, Columbus, Ohio, is the winner of the drawing for an iPad Mini for participating in our survey. Thanks to the more than 1,000 of you who also took part. 24 January 2013 QR ForResidentialPros.com LIRA anticipated a reasonably weak third returning and a feeling that things are quarter, but "the trajectory seems to be even going to go OK; that encourages people to a bit stronger than we thought it was going reinvest in their homes. With the increase to be," he says. in house prices, we start to see fewer homeA significant factor driving the remodowners who are underwater with their eling recovery, Baker says, is a strong mortgages, and more households potenrecovery in the broader housing market. tially are able to borrow against equity to "Housing starts and new home sales are fund home improvement projects." coming off an incredibly weak base, but we're seeing strong growth. We'll probably Financing, Financing, Financing see close to a 25 percent increase in housFinancing, of course, is perhaps the biggest ing starts in 2012, when we get the numproblem the remodeling industry is facing bers in, and the consensus is for another now. Baker points to a quarterly survey of 25 percent in 2013. That will take us up to bank lending officers by the Federal Reserve a million starts or so. I Outlook for 2013 think, and most others feel, once our economy 50% is back to normal it 50.19% can support 1.5 to 1.7 40% million starts. We're still well below where 32.17% 30% we think we'll be in a few years, but those 20% are good solid numbers." 10% 11.42% With a strengthen6.23% ing housing market, 0% home prices start to Good Fair Excellent Poor i nc r e a s e a nd t he mobility of homeGreatest Challenge(s) To Revenue Growth in 2013 owners rises as well. 38.1% 35% "Mobilit y is ver y 30% important for home 25% improvement activity; that's the most com20% 21.7% mon t i me [when 15% homeowners move 12.5% 10% 10.5% into a new house] for 9.1% undertaking a proj5% 5.6% 2.5% ect," Baker explains. 0% r y l g rs es ion he ilit era din ric fea lat Ot ab en lp "You start to get a er len gu ail ia s/ ng av um t re ter nk yi ns or en Ba Ma om Co ab L rnm on general confidence ve Ec Go