Kitchen & Bath Design News

MAR 2013

Kitchen & Bath Design News is the industry's leading business, design and product resource for the kitchen and bath trade.

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Barometers { A look at key statistics & trends shaping the industry } Housing Upswing Seen Lasting Through 2013 T he current upswing in the nation���s housing market is expected to continue through 2013, pointing to solid gains in the residential remodeling sector as well, according to leading analysts. Among the key statistics and forecasts released in recent weeks by government agencies, research prms and industryrelated trade associations were the following: RESIDENTIAL REMODELING After languishing for several years, the U.S. remodeling industry ���appears to be pulling out of its downturn, and a renewal of the nation���s housing stock is underway,��� according to a major report by the Joint Center for Housing Studies of Harvard University. According to the report, foreclosed properties are being rehabilitated, sustainable home improvements are gaining popularity, older homeowners are retroptting their homes to accommodate their evolving needs, and the future market potential ���is immense,��� as the emerg- helping many home buyers, but tight inventory and restrictive mortgage underwriting standards are limiting sales,��� he commented. Yun added that expected job creation and household formation will continue to fuel additional growth this year. ���Although tight inventory is limiting home sales in many areas, overall sales are expected to stay on an upward trend,��� added NAR President Gary Thomas. according to the Kitchen Cabinet Manufacturers Association. According to the Reston, VA-based KCMA, manufacturers that participated in the association���s monthly ���Trend of Business��� survey reported that overall cabinet sales in 2012 totaled $4.7 billion, which was up 7.3% from the sales reported in 2011. Sales of stock cabinets were up 11.7% for the entire year, while semi-custom sales gained 4.5%, and custom cabinet sales inched slightly up 0.1%, the KCMA reported. ing echo boom generation is EXISTING-HOME SALES projected to be the largest Pent-up demand is ���susin the nation���s history. ���As taining the market��� for baby boomers move into reexisting-home sales, which tirement, they���re increasing remain well above levels of demand for aging-in-place a year ago and are expected retropts,��� said Kermit Baker, to continue their recovery in director of the Remodeling 2013, the chief economist for Futures Program. ���A decade the National Association of ago, homeowners over 55 Realtors said last month. Acaccounted for less than one cording to Lawrence Yun of CABINET & VANITY SALES third of all home improvethe Washington, DC-based Sales of kitchen cabinets ment spending. By 2011, this NAR, record-low mortgage and vanities rose in 2012 as share had already grown to interest rates ���clearly are compared to a year earlier, over 45%. And generations behind the baby boomers will help fuel future spending growth, QUARTERLY MOVING RATE OF CHANGE since echo boomers are projected to outnumber baby boomers by more than 12 million as they begin to enter their peak remodeling years over the next decade.��� The surge in disAll signs point to a strong rebound for home improvement activity throughout 2013, according to tressed properties the Leading Indicator of Remodeling Activity (LIRA) released last month by the Remodeling Futures coming back onto Program at the Joint Center for Housing Studies of Harvard University. As reqected in the graph the market is also above, the remodeling sector witnessed an upswing in home improvement spending during 2012 ��� contributing to an with the latest LIRA projecting that annual homeowner improvement spending will see accelerating increase in remoddouble-digit growth through the third quarter of 2013. el i ng spend i ng, Source: Joint Center for Housing Studies, Harvard University Baker said. THE CONTINUED UPSWING IN HOME REMODELING ACTIVITY 2010 2011 2012 2013 MARKET ANALYSIS Housing Upturn Seeing Gaining in 2013, But ���Headwinds��� Could Impede Growth 10 | Kitchen & Bath Design News March 2013 Las Vegas ��� The housing upturn that took root last year is expected to pick up momentum in 2013, although headwinds on several fronts could impede the pace of recovery, according to economists speaking at the International Builders��� Show, held in Las Vegas in January. ���Nearly every measure of housing market strength ��� sales, starts, prices, permits and builder conpdence ��� has been trending upward in recent months, and we expect to see gradual but steady growth along these lines in 2013,��� said NAHB Chief Economist David Crowe. In particular, Crowe said that house prices are up nearly 6% on an annualized rate over the past 10 months, and that ���this has been a trigger for demand to return.��� Other factors that bode well for the housing outlook, Crowe said, include low mortgage rates, strong housing a���ordability, rising household formations and the fact that two-thirds of U.S. housing markets can now be considered improving. Crowe cautioned, however, that builders continue to face several challenges, including stubbornly tight mortgage lending conditions, inaccurate appraisals, rising materials prices and a declining inventory of buildable lots. Moreover, continuing political gridlock in Washington threatens to negatively impact consumer conpdence and future housing demand, he said. The NAHB is forecasting 949,000 total housing starts in 2013, up 21.5% from 781,000 units last year. Single-family starts are projected to rise 22%, from 535,000 last year to 650,000 in 2013. They are expected to jump an additional 30% in 2014 to 844,000 units. In the multi-family sector, NAHB is projecting that starts will gain 22%, from 246,000 units last year to 299,000 in 2013, and rise an additional 6% to 317,000 units in 2014.

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