Qualified Remodeler Magazine

APR 2019

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.

Issue link: https://qualifiedremodeler.epubxp.com/i/1107022

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Page 8 of 102

You Picked the Right Industry Patrick L. O'Toole them are over 20 years old and require reno- vations and repairs. Rental properties played a big part as investors, starting 10 years ago, scooped up and improved millions of fore- closed properties. In 2017, rental remodeling totaled $131 billion, up from $101 billion in 2015. Also, home equity has surged with rising house prices in most places around the U.S. now exceeding previous peak levels. Outlook on solid fundamentals. A handy tool on the Harvard Joint Center website allows visitors to compare earlier data with present-day numbers. The tool shows that bath remodels have seen the biggest share of growth among top remod- eling projects, up 155 percent since 1995. Kitchen projects are up 140 percent. And those two categories, as well as exterior replacements, will help the market continue to grow in the coming years, the report finds. Future growth is riding on the needs of aging baby boomers, whose baths and kitchens will require modifications. In addition, younger buyers seem to have finally hit their stride—getting raises, shedding debt and improving the homes they are increas- ingly buying. The report sees other drivers as well. Energy efficiency and other replacement projects will be strong. So, too, will be the impact of more disaster repair spending. And finally, a proliferation of project financing options should only help owners access the money they need to maintain and modify their homes. The conditions in our industry are strong. The rest is up to you. A FEW YEARS BACK , I had the good fortune to interview two brothers who built a very large and profitable home building compa- ny in Owensboro, Kentucky: Bill and Scott Jagoe. Their accomplishments were all the more noteworthy because the local area had shrunk in population during their height of peak growth and profitability. One observer noted that if they had been born in Houston, the Jagoes would be billionaires. I like that story for two reasons. First, we are all lucky to have been born in America, where we are free to be entrepreneurs. Second, I like that story because it is so true. OƁentimes a person's opportunity is dramatically impacted by underlying con- ditions that are well beyond an individual's ability to add or detract from them. We are challenged to succeed given the hand we are dealt. This is particularly true in business. Now comes a biennial re- port released in March from Harvard University's Joint Center for Housing Studies that puts a spotlight on the underlying con- ditions in the U.S. remodeling market. Those conditions are enviable. Let me highlight some key findings. Market hit $424 billion in 2017. Why cite two-year-old numbers? Well, there's not much choice. Harvard analyzes the most comprehensive housing data—the American Housing Survey, which is released every oth - er year. These are the most recent numbers. The $424 billion market size is more than $100 billion higher than just five years before in 2012. This figure represents 2.2 percent of the U.S. economy. Many growth drivers. There are 137 million homes in the U.S., and 40 percent of them are over 50 years old; 80 percent of HARVARD REPORT: CONDITIONS IN REMODELING ARE STRONG EDITORIAL DIRECTOR'S NOTE 8 April 2019 QualifiedRemodeler.com A preferred publication of the National Association of the Remodeling Industry and the NAHB Remodelers Published by SOLA Group, Inc. 1880 Oak Ave., Suite 350 Evanston, IL 60201 847.4 40.3000 Publisher and Patrick L. O'Toole Editorial Director Patrick@SOLAbrands.com Ext. 103 Senior Editor Kyle Clapham Kyle@SOLAbrands.com Ext. 107 Managing Editor Kacey Larsen Kacey@SOLAbrands.com Ext. 105 Contributing Editor Chuck Ross Audience Development Mike Serino Mike@SOLAbrands.com Creative & Production Director Tracy Hegg Tracy@SOLAbrands.com Senior Graphic Designer Erika Nygaard Erika@SOLAbrands.com Editorial Advisory Board Stephen Gidley, GMB, CAPS, CGP, CGB, CGR, CPRC, CR Jeffrey Holloway, CKD, CBD, CGR Michael Nagel, CGR, CAPS Scott R. Sevon, CGR, CAPS, GMB, CGP, GMR Donna Shirey, CGR, CAPS, CGP Kenneth P. Skowronski, CR Publisher/ Paul DeGrandis West Sales Manager Paul@SOLAbrands.com Ext. 100 Midwest Sales Manager David Ayala David@SOLAbrands.com Ext. 119 Midwest Sales Manager Zach Stenberg Zach@SOLAbrands.com Ext. 115 Northeast Sales Manager Dan Miklosz DanM@SOLAbrands.com Ext. 118 Southeast Sales Manager Dan Agostinacchio Dan@SOLAbrands.com Ext. 101 National Automotive Sales Tom Lutzke TLutzke@ACBusinessMedia.com Product Showcase Mike Serino Mike@SOLAbrands.com Ext. 102 Digital Programs Manager Tim Steingraber Tim@SOLAbrands.com Ext. 106 Projects Manager Heidi Riedl Heidi@SOLAbrands.com Ext. 111 Subscriptions QR Circulation Dept. (866) 932-5904 QualifiedRemodeler@omeda.com

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