Kitchen & Bath Business - January 2018 - 20

Industry Outlook

What's on the
Horizon for 2018

The remodeling industry gets a strong
boost from baby boomers aging in
place and a lack of housing inventory

HE REMODELING INDUSTRY HAD A REMARKABLE

YEAR IN 2017 with a 17
percent increase, and
although the increase
will not be as high in
2018, it will still rise
steadily. A lack of
housing inventory has
led to a boost in remodeling projects in current
homes, as has the desire of people to stay in their
homes longer and age in place.
Potential threats to this thriving industry include
a shortage of skilled labor with the ongoing challenge of attracting a new generation of workers.
And because of recent natural disasters, remodelers are expected to have to pay more for building
materials over the next few years.
New construction is creeping along - especially
in single-family housing - but as prices rise, people
will opt to stay in their current homes and renovate
instead of buy. Many of these renovations will include elements for living in place,multigenerational
design and design for health and well-being.Technology will also play a part, but it is taking a little
longer than expected to be considered mainstream.
Kitchen and bath trends now and into the near
future include farmhouse style with contemporary
updates; white and gray hues with the introduction of bolder colors; hidden appliances; design
for every stage of life; natural elements; and large
shower areas.
KBB spoke to several experts for more detail on
our industry's movement in 2018, and they shared
some things that shocked them about 2017.

What is the 2018 outlook for remodeling and
new construction?
Dietz: For gross domestic product, we are looking
for another modest growth rate - about 2.4 percent next year and then weakening to 1.9 percent
in 2019.The next recession is likely to happen over
the next four to five years.
For remodeling, 2017 was a standout year with a
17 percent increase in spending; 2018 will be 7 percent.There has been strong growth because of lack
of inventory; instead of buying new, homeowners
are opting to remodel their current homes. Labor
access will affect this growth moving forward, as
the rate of unfilled jobs is higher now than it was at
the peak of the building boom.There will remain a
constant challenge to attract workers.
For single-family housing, we are seeing continued growth rates, and expect that to increase 7
percent over the next two years. The industry will
continue to expand or under-build based on the
need for new housing. We will need 1.3 million
homes by 2019, and we are not at one million now.
Price growth for homes will increase faster than
income growth, which will raise their prices. As
housing affordability declines, more homeowners
will want to renovate rather than buy new. We saw
a slight decline in multifamily housing, and there
will be smaller declines in 2018-2019.

BILL DARCY

CEO of the National Kitchen
& Bath Association (NKBA)

ROBERT DIETZ

Senior Vice President &
Chief Economist of the
National Association of
Home Builders (NAHB)

Gutierrez: All signs indicate that we will see a

BY CHELSIE BUTLER

strong remodeling market in 2018 and a mixed,
conflicted new residential market. For 2017,
homeowner remodeling had gained nearly 20
percent, attributable by some to the restricted inventory of homes for sale.This, it is claimed, forced
homeowners to stay put and persuaded them to
remodel instead.
In reality, the strong market is more the result of
the robust economy. Were it not for the hurri- 
canes that hit both SouthernTexas and Florida,

Kitchen & Bath Business / JANUARY 2018 / KBBONLINE.COM / The official publication of KBIS (KBIS.com)

RANDY FISER

Hon. FASID & CEO of the
American Society of Interior
Designers (ASID)

http://www.KBBONLINE.COM http://www.KBIS.com

Kitchen & Bath Business - January 2018

Table of Contents for the Digital Edition of Kitchen & Bath Business - January 2018