Kitchen & Bath Design News

FEB 2015

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Barometers { A look at key statistics & trends shaping the industry } 8 | Kitchen & Bath Design News | February 2015 T he housing, remodel- ing and kitchen/bath markets, even in the face of continued headwinds, are expected to post a solid growth year in 2015, accord- ing to the latest forecasts by leading analysts. Among the key statistics and forecasts released in recent weeks by government agencies, research frms and industry- related trade associations were the following: HOUSING STARTS & NEW-HOME SALES Given current strong de- m a nd , a f fordable home prices and favorable interest rates, housing production is projected to continue to grow into 2015, the chief economist for the National Association of Home Builders said last month. According to David Crowe of the Wash- ing ton, DC-based NA HB, the three-month moving averages for total and sin- gle-family production are at their highest levels since the Great Recession. At the same time, new-home sales have held in a relatively stable range during the past four months, the NAHB noted. "The number of houses un- der construction has been on an upward trajectory, signal- ing that housing is moving forward," Crowe observed. "As the labor market and broader economy continue to strengthen, we can expect the housing sector to gain momentum," he added. EXISTING-HOME SALES While the final numbers are not yet in, total existing- homes sales were expected to fnish 2014 around 4.94 million units, down 3% from 2013, but with a projected rise to 5.30 million units in 2015, the National Association of Realtors said last month ( see related Market Analysis be- low ). The national median existing-home price for 2014, approximately $208,000, up 5.6 percent from 2013, is expected to moderate to a pace of between 4% and 5% in 2015, according to the Washington, DC-based NAR. "Lagging homebuilding ac- tivity continues to hamstring overall housing supply and is still too low in relation to promising job growth," the trade association observed. "Much faster price and rent appreciation – easily exceed- ing wage growth – will occur this year unless new construc- tion picks up measurably." CABINET & VANITY SALES Sales of kitchen cabinets and vanities closed 2014 on the same growth note that they had sounded throughout the entire year, posting an 8.8% gain in December that helped fuel a signifcant in- crease for the full year, the Kitchen Cabinet Manufac- turers Association said last month. According to the Reston, VA-based KCMA, manufacturers participating in the association's monthly "Trend of Business" survey reported that cabinet/vanity sales for 2014 rose 9.2% over the previous year. Sales of stock cabinets in 2014 were up 10.5% over sales in 2013, while semi-custom cabinet sales rose 7.1% and custom cabinet sales gained 14.3% compared to the previous year, the KCMA said. APPLIANCE SHIPMENTS Domestic shipments of ma- jor home appliances ended 2014 on a positive note, rising sharply in December and posting a healthy gain over the previous year, ac- cording to the Association of Home Appliance Manu- facturers. The Washington, DC-based AHAM reported last month that 2014 appli- ance shipments totaled 67.48 million units, a 5.5% increase over the 63.94 million units shipped in 2013. Shipments in December, 2014 were up 11.6% over those the same month a year earlier, AHAM reported. WASHINGTON, DC — Existing-home sales, a key precursor of residential remodeling activity, are forecasted to rise about 7% in 2015 behind "a strengthening economy, solid job gains and a healthy increase in home prices," according to a newly released forecast by National Association of Realtors Chief Economist Lawrence Yun. "Home prices have risen for the past three years cumula- tively about 25%, which boosts confdence in the market and traditionally gives current homeowners the ability to use their equity buildup as a down payment toward their next home purchase," Yun said, adding that frst-time buyers are expected to slowly return as the economy improves. Despite his forecasted increase in sales, Yun cited the anticipated rise in interest rates, lenders being slow to ease underwriting standards back to normalized levels, and home- owners unwilling to move because they are comfortable with their current low interest rate "as potential speed bumps that could slow the increased pace of sales this year." Job Gains, Rise In Home Prices Seen Fueling Resale Market MARKET ANALYSIS Underlying Factors Point to 2015 Housing Growth 2014 2013 Additions/Alterations 62% 58% Kitchen & Bath Remodeling 60% 58% Custom/Luxury Home Market 35% 30% Move-up Home Market 30% 29% First-Time Home Market 2% 10% Townhouse/Condo Market 19% 12% Second/Vacation Home -5% -18% HOUSING BUSINESS CONDITIONS BY CONSTRUCTION SECTOR FIGURES REPRESENT THE NUMBER OF SURVEYED RESPONDENTS REPORTING SECTOR 'IMPROVING' MINUS THE PERCENTAGE REPORTING SECTOR 'WEAKENING' IN THE THIRD QUARTER OF 2014. Kitchen and bath remodeling continues to be among the top two residential construction sectors in terms of overall business conditions, according to the latest in a quarterly series of 'Home Design Trend Surveys' conducted by the American Institute of Architects among a panel of more than 500 architecture frms that concentrate their practice in the residential sector. The other leading sector, as refected in the fgures above, includes additions and alterations. In contrast, the market for second/vacation homes, while improving, continues to lag other key sectors. Source: American Institute of Architects

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