KBB - January 2009 - (Page 14)

Focus The Year Ahead Uncertainty hits the remodeling industry The 2009 K+BB Market Forecaster echoes the economic sentiments held across the country. While last year’s forecaster largely previewed the economic fallout that came to fruition in 2008, this year’s edition has a cautious outlook with a number of consumers’ dollars waiting on the sidelines until consumer confidence improves. The most marked variance in this year’s data is the large number of consumers who are “not sure” about how they will complete the job. Upon deeper analysis, this translates to “we have a need, but we aren’t sure we can satisfy it at this time.” Based on the current economic turmoil, a large number of people may have plans to remodel, but need to wait to see if—or, more appropriately, when—the market recovers. These factors have produced a range of forecasted spending, a “low” that excludes those who are “not sure” and a “high” that includes all who are “not sure.” The rise in kitchen jobs for 2009 is potentially the result of latent demand stemming from a 4% decline in jobs in 2008. Unfortunately, the dollars spent per job is expected to decline from $15,229 to as low as $13,238 in 2009. This signals that consumers are not willing to forego the kitchen remodel completely, but will rein in spending. The decline in bathroom jobs continues its precipitous fall from 2007. Since then, jobs have already declined by 9%, with another 9% decline on the horizon for 2009. Similarly, dollars have decreased by 3%. In 2009, the spending is forecasted to be down by as much as 9%. Last year’s report hypothesized that consumers were focusing on central locations of their homes such as kitchens and delaying bathroom remodels. That trend appears to be continuing, as bathroom remodels are expected to be down again in 2009 by as much as 9%. HOW SPENDING AND THE NUMBER OF JOBS WILL CHANGE IN 2009 2008 (Actual) Range 2009 (Forecasted) Percent Change From 2008 +27% -3% +10% -11% Jobs Kitchen Spending* 6,531,657 $99,472.6 High Low High Low 8,296,646 6,354,878 $109,832.7 $88,852.1 Jobs Bath Spending* *Spending in millions 9,098,572 $42,943.3 High Low High Low 9,704,260 8,307,706 $45,398.1 $38,926.3 +7% -9% +6% -9% KITCHEN AND BATH SPENDING SCENARIOS Best-Case Scenario Worst-Case $109,832.7 $88,852.1 $45,398.1 $38,926.3 Kitchen Spending (in millions) 2009 Bath Spending (in millions) 2009 IT’S THE ECONOMY • Subprime mortgage crisis: According to the Mortgage Banker Association, 6% of all loans are currently in foreclosure. This represents the highest foreclosure rate since 1985. The large number of foreclosures has depressed the housing market, as many consumers are having a more difficult time borrowing money. Furthermore, homeowners may not see a return on investment in the immediate future and therefore may elect not to upgrade the kitchen or bath until home values stabilize and begin to appreciate. Continued on page 16 14 + K BB January 2009 / www.kbbonline.com / The Ofﬁcial Sponsor of K/BIS www.kbis.com http://www.kbbonline.com http://www.kbis.com

Table of Contents for the Digital Edition of KBB - January 2009

K+BB - January 2009
Contents
Online Contents
Online News
Editorial
Focus
Consumer
Trends
Products
Options
Profile
Design
Green
Additions
Opinion
Editorial Index
Ad Index
Favorites

KBB - January 2009