Qualified Remodeler Magazine

JUN 2018

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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Page 7 of 59

ohn Burns Real Estate Consult- ing released its updated forecast for the remodeling industry, and its outlook calls for 7.9 percent growth in 2018 to $374.4 billion in activi- ty. For 2019, the growth continues at a 10 percent rate to $385.4 billion in activity. According to Burns economist Todd Tomalak, four key drivers for the industry include rising incomes, higher house-price appreciation, a marked increase in activity from first-time home buyers, and continued volumes of storm repair work. First-time home buyers conduct 18 per- cent more remodels than average owners, Tomalak said, as they are buying homes that need updates. House prices are ex- pected to rise 6 percent nationally in 2018, which drives increased home equity and higher remodeling demand. Meanwhile, real wage growth is projected by the Atlanta Fed to hit 3.2 percent in 2018, while inflation remains low at 2.2 percent. e labor shortage is cited as the primary reason for the delay in storm repairs to the Gulf Coast region, which continues into 2018. e Burns forecast splits remodeling and repair activity into large-project work (any- thing over $5,000) and small-project work (anything under $5,000). Small-project ac- tivity will experience the most robust rates of growth, according to the forecast—11.2 percent in 2018 and 11 percent in 2019. Big- project activity growth will be less strong at 6.5 percent in 2018 and 3.8 percent in 2019. New Forecast Bullish on Remodeling Growth INDUSTRY FORECAST J continued EVENT Prominent remodelers discuss exit strategies at PCBC Two of Northern California's finest remodelers—Iris Harrell and Darius Baker—will share their lessons learned from selling their remodeling firms. Iris Harrell sold her Mountain View, California, firm as part of an employee stock ownership plan (ESOP) over a 10-year period. Darius Baker completed the sale of D&J Kitchens & Baths Inc. via a business broker late last year. Remodelers will hear firsthand many of the ins and outs of selling a remodeling business. The focus will be on best ways to position your remodeling company for a successful sale, and what to expect from potential buyers. The session will be held as part of the PCBC conference at San Francisco's Moscone Center at 11 a.m. on June 28 and will be moderated by Qualified Remodeler publisher Patrick O'Toole. To learn more and register go to www.PCBC.com. MILESTONES CBIA 75th anniversary The California Building Industry Association (CBIA) will celebrate its 75th anniversary at the upcoming PCBC 2018, June 27-28 at the Moscone Center in San Francisco. CBIA was established in 1943 as a fed- eration of local and regional associations, representing builders at the state level. For years, the group functioned solely as a lobbying organization. CBIA has grown to include legislative, political, technical, regulatory and legal departments, as well as PCBC, the largest homebuilding trade- show in the western U.S., and the affiliated California Homebuilding Foundation. Iris Harrell, founder and former owner, Harrell Remodeling 8 June 2018 QR QualifiedRemodeler.com IN BRIEF Burns Residential Repair and Remodel Spending ■ Small Project Discretionary ■ Big Project Discretionary ■ Disaster Repairs Source: John Burns Real Estate Consulting, LLC; U.S. Census, CTBUH (Data: Feb-18, updated quarterly) '07 $284.9 $270.5 $233.1 $215.0 $247.1 $237.3 $240.3 $265.4 $282.4 $303.8 $347.0 $374.4 $385.4 $384.6 $3874 $400 $350 $300 $250 $200 $150 $100 $50 $0 Remodeling Spending, $Billions '08 '09 '10 '11 '12 '13 '14 '15 '16 '17E '18P '19P '20P '21P

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