Updated: Sep 11, 2019
Keeping an eye on renovation trends is a key way for showrooms to anticipate client needs. It is a major part of the marketing research, especially for showrooms serving different market segments, from new homeowners to seniors looking to age-in-place.
There are so many studies out there, it can be hard to keep track. We looked at the major research put together the information you need to keep ahead of the game for the rest of 2019 and into 2020.
People are renovating
The good news is that the home improvement market is steady for the third year in a row. While new home building has hit a low point, people have invested nearly $425 billion into renovating owned and rented homes in 2017.
With more and more people choosing to age in place and high building costs leading to fewer new home, the remodeling industry and its partners will play a major role in helping people stay secure and comfortable.
And they’re renovating older homes
The remodel market will remain strong, considering that around 55 million homes (40% of the country’s home) are at least 50 years old and in need of some TLC. Half of this remodel market is driven by the 55+ market segment.
The other half of the remodel market can be attributed to first-time homeowners, many of whom are around the age of 30 or older. Due to the state of the housing market, which has seen a slowdown in new-home construction, older homes are more readily available and more affordable than brand-new homes.
Of course, these older homes are in need of everything from minor upgrades to full-scale renovations. New owners in the millennial demographic enjoy making changes that suit their tastes, often taking on projects themselves.
What are they spending?
According to Houzz, the average renovation investment is $15,000. Spenders in the top 10% put out an average of $80,000. In 2019 homeowners plan to spend, on average, $10,000 for renovations. Note that there was a rise in homeowners who invest less than $5,000; they now account for 19% of renovating homeowners.
Why are they renovating?
One study reveals that the majority of renovations were sparked by two reasons: the homeowner wants to stay in the same home or they want to personalize the home to their tastes.
Other reasons include:
It is cheaper to renovate than to move
Renovating improves resale value of the house
Changes in family situation (in-law suites, new baby, aging-in-place)
Baby boomers are investing in aging-in-place improvements, as more and more choose to stay at home rather than move into retirement communities or facilities.
In the middle of the pack, Gen X homeowners in their 40s and 50s are at peak income and finally have the extra funds for the kitchens and bathrooms of their dreams; they may also be investing in secondary, vacation or income properties.
When combined, Gen-X and baby boomers represent 81% of the renovation market.
Millennials, who can be breaking into home ownership or upgrading to a larger home, look at renovations from a slightly different perspective. They aren’t spending on dream projects but looking at ROI and heavily researching prices. Still, aesthetics are very important and millennials are likely to share photos of their renos on social media.
Younger homeowners, those in their 20s and early 30s, are gaining a foothold in the home improvement landscape, especially in the Midwest and the South, where owning is more affordable.
Millennials (25-34) and Baby Boomers (55-74) are expected to drive the home improvement market for the foreseeable future.
What are they looking for?
Popular products include custom cabinetry, smart appliances, custom storage options, high-end countertops, unique ventilation hoods and backsplashes and luxury plumbing fixtures.
If your showroom draws millennials, consider adding smart technology and security options to your product mix. Millennials are also confident amateur decorators, so don’t neglect to offer unique décor elements, from tiles to wall coverings to wall art.
Focus on kitchens and bathrooms
Kitchens remain the priority, despite being the most expensive room in the house to renovate. In 2018, the average spend rose 27%.
In detail: the average kitchen remodel cost $35,000 (kitchens more than 200 sq.ft. or more) and $23,000 (less than 200 sq.ft.)
While the spending increase in this room is not as steep as it was in kitchen remodels, renovators spent an average of 14% more on bathrooms in 2018; spending on non-master bathrooms rose 17%.
In detail: The average price tag for master bathroom renos was $8,000, which non-master bathrooms set homeowners back an average of $3,500. Major remodels, in which cabinetry, vanities, countertops and toilets were replaced, ran an average of $17,000 and $10,000 respectively.
If you offer design services or work with designers, good news. 87% of people surveyed by Houzz about their renovations hired professionals to do the work.
Challenges can be expected these days because people have so much access to design resources on television and the internet. As a result, design professionals have noticed that clients are coming in with long wish-lists and unrealistic time and budget expectations.
Renovations are also costing more and understanding the reasons behind the rise can help you explain the changes to clients. Some of the increase can be explained by ongoing trade disputes with China, general material shortages and rising material costs.
Another issue to consider is the lack of skilled labor in the construction industry. The NKBA reported that two-thirds of survey respondents had difficulties hiring skilled workers, especially carpenters and finish carpenters. 30% of jobs experienced delays due to the labor shortage.
These are good points to keep in mind when discussing renovation plans with clients, who may have unrealistic expectations when it comes to budget and deadlines.