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remodeling expenditures," he says. "However, by 2013, they comprised half. It's expected that that segment of the market will surge in the next three years because, in part, boomers don't want to admit their age, or that they're getting older. And they have no intention of leaving their homes. However, more than 45% of all of the homes in the country have no provisions for aging in place, or for Universal Design. If they want to stay in their homes, there are renovations they have to get done." That is good news for the industry, especially as it relates to Universal Design and aging in place, Pekel notes, adding that he is currently working with three clients over the age of 80 who are embarking on major projects. "It's exciting to work with an educated consumer who may have a physical requirement, but wants to approach the home in a stylistically sensible fashion," he says. "There also seems to be a general awakening and acceptance that the principles of Universal Design indeed have universal application and go beyond just the boundaries of age by enhancing the living environment for all users. "Professionals in our industry have an outstanding oppor- tunity to be the smartest people in the room when it comes to assisting those who want to stay in their home. That home is probably paid for, which means the homeowners likely have the fnancial resources to do it right, and they are looking for profes- sional guidance on how to do that. That's pretty exciting!" next two years. We expect that at the end of 2017, they will still be below 6%, so don't be afraid of the interest rates." Hale agrees. "I think a lot is made of the upcoming increase in interest rates that everyone is anticipating," she says. "Our position is that the Fed moving to a more normal monetary policy is a sign that the underlying economy is healthy…and that is a good thing for the market." WHO BENEFITS MOST? While some areas of the industry have recovered, the dynamics within it have changed from its heyday. In general, Darcy notes that people investing in kitchen and bath projects now are not basing their decisions on increasing the value of their home, but rather trying to accommodate their lifestyle and needs. "More than half of our members who responded to our an- nual trend survey said that typical customers are empty nesters and multi-generational households," he says. "These tend to be the major projects, mid to high-end. Empty nesters are in their peak earning years, which is good for designers who work on those projects. Multi-generational households can also require some signifcant renovations to accommodate the aging-in- place loved one, so this is all good for the industry." Pekel notes baby boomers are another growth area. "In 2007, baby boomers made up less than one-third of all Most Designers Optimistic About What Lies Ahead EXPERTS ARE PREDICTING that 2016 will continue an upward trend toward recovery, and the majority of kitchen and bath designers and dealers surveyed by KBDN feel the same optimism, although many say growth won't be without its challenges. When comparing projects on retainer for the fourth quarter of 2015 versus the fourth quarter of 2014, Chris Awadalla, Sanctuary Kitchen Design, in Denver, CO, expects business condi- tions to be better in 2016. "Our biggest potential growth area is providing services and products for custom built new-construction homes. Our biggest challenge will be balancing our growth with customer service. While we defnitely want to increase sales and improve proft margins and the bottom line, ultimately my main goal is to focus on providing a level of customer service that is top notch in our specifc market. This will probably mean turning down projects from time to time due to workload. However, I feel that declining a project or two in order to provide a higher level of customer service will ultimately lead to a stronger client base in the long term." Steve Zimmer, Remodel Cincinnati, in Cincinnati, OH, expects remodeling to be strong, and he is determined to make 2016 better. "We expect the desire for remodeling kitchens and baths to be strong, especially with growth in mother-in-law suites and extra rooms in the basement for extended family. Our biggest chal- lenges will be fnding skilled help, government interference and the rising costs of insurance and materials." With several larger projects booked with retainers for the spring and current production car- rying through this winter, Regis McQuaide, Master Remodelers, in Pittsburgh, PA, expects 2016 will be a better year. "We also have several projects in the design phase. Room additions or structural changes with a kitchen renovation seem to be hot items for us. Replacing the aging but talented workforce with a smaller pool from which to draw qualifed applicants will be a challenge." The new year is also of to a good start for Peggy McGowen, Kitchen & Bath Concepts, in Houston, TX. "I predict 2016 will defnitely be better, although 2015 has been pretty good. We're already working on designs for kitchens in new construction for early 2016. In our area, there has been a big increase in new construction of luxury homes, townhouses and condomini- ums. These developments have already proven to ofer immediate growth potential. While the increase of new construction has been good for business, it has also created a shortage of labor for kitchen installations. We are also completely redoing our showroom, so another big challenge will be maintaining ongoing sales while working in a space under construction with piecemeal displays and sawdust until our own construction and installation are complete." In Atlanta, GA, Michelle Fee, Change Your Bathroom, sees projects continually getting better from the scope of work to the project prices and budgets clients are allocating for their bathrooms. "Our biggest growth potential lies in trying new things in bathrooms. We have the ideas, but sometimes clients are afraid to implement them into their own bathrooms, whether they are too 'daring,' or even too luxurious. Our biggest challenge will be staying ahead of the trends. We like to make sure we are always abreast of the new trends, whether it is styles or products, and we like to push the boundaries and [hopefully] bring in new trends. But the Internet helps usher in new trends faster and faster these days." Business in 2015 was good for Rollie Clarkson, Remodeling Contractors, in Johnston, IA. "Things got on a pretty good roll last year, and I don't see a slowdown in our area. I see people willing to do some pretty extraordinary things to their houses. Many are willing to go further with a project, not backing down from higher-end materials and products. More people are wanting to drive the BMWs (nicer projects) over the Chevys (lower-priced proj- ects). Labor force and subcontractor availability will be our biggest challenges. We are fghting that now, and I don't see it changing much. It will be a great opportunity for unemployed or under-employed workers to get into the trades and make a decent living." John Arnott, Wright Associates, Atlanta, GA expects business in 2016 to be about the same, "with a hopeful slight increase. The limiting factor is limitations in contractor capacity. Most are booking business out into the new year quite a ways. Our challenges are with 'old thinking' and an unwillingness to explore new ideas and product utilization. Business can outstrip supply of trained labor and products in demand." 72 Kitchen & Bath Design News • January 2016 FORECAST 2016