Kitchens are in high demand. Why not designers?
Wednesday, January 17, 2018
Early estimates indicate that the remodeling industry did much better than expected in 2017. Business should be good this year as well, although forecasts call for a slower pace in growth year over year.
With all this activity going on, it begs the question, why aren't kitchen designers and remodelers expanding their share of market?
After years of gradual post-recession recovery, the remodeling industry is enjoying its moment in the sun. Recent analysis by John Burns Real Estate Consulting estimates total expenditures on home repair and remodeling grew by nearly 15 percent year over year in 2017, and projects an additional 7.3 percent growth in 2018. Moreover, for the years 2017-2019 homeowners are expected to spend more on big projects, such as kitchen and bath remodels.
Rising home values, low homeowner mobility and a shortage of new or newly-renovated homes for sale are driving demand for remodeling services. Findings from the latest RICKI Quarterly Tracking Study for the fourth quarter 2017, from the Research Institute of Cooking and Kitchen Intelligence, state 2 out of 3 homeowners — including more than 3 out of 4 millennials — believe now is a good time to invest in their home.
This trend is reflected in the just-released 2018 U.S. Houzz Kitchen Trends Study, which finds an increase in recent or planned major kitchen remodel projects and the average remodeling budget compared to results from last year's study.
Among the homeowners on Houzz who participated in the study, more are choosing to enlarge their kitchen (40 percent vs. 36 percent in 2017), and almost 9 in 10 want a complete style makeover. They also are willing to spend more to get the look, functionality and quality they desire.
Homeowners undertaking larger projects are more likely to hire a professional to assist them. Only slightly fewer respondents in this year's study (85 percent vs. 88 percent in 2017) said they had hired or planned to hire a professional. The majority of these homeowners are baby boomers, many of whom have lived in their homes for 10 years or more and have higher levels of home equity. They also are less likely to want to handle a major project themselves, as compared to millennials.
There is no doubt the kitchen and bath industry has benefited from these trends. Most firms are experiencing healthy growth and reported a backlog of projects in the pipeline going into the fourth quarter of last year.
Nonetheless, the Houzz study reveals that kitchen designers and remodelers are having difficulty expanding the market for their services. For the third straight year, the share of market remained more or less constant among the professionals homeowners are hiring to assist with their projects.
Contractors, with more than half the market, are by far the most requested professionals (52 percent in the 2018 study, 54 percent in 2017 and 54 percent in 2016). Kitchen designers come next, at 26 percent, 25 percent and 27 percent, respectively; followed by interior designers (at 14 percent all three years), and kitchen remodelers (11 percent, 10 percent and 10 percent).
These are overall percentages. From a budget perspective, it makes sense that homeowners who are making minor changes, want to replace plumbing or electrical fixtures or are doing primarily DYI upgrades would opt to work with a contractor. Presumably, those homeowners undertaking higher-end, more costly projects are more likely to hire a designer, but that data is not available.
Given that 9 out of 10 of the Houzz respondents want to do a complete style makeover and that 6 in 10 say their top design priority is to obtain a stylish and beautiful new kitchen, it would seem that designers and remodelers have an opportunity to reach out to a new pool of clients and demonstrate their professional difference from contractors and specialty providers.
With demand continuing to run high and homeowners willing to spend more to get the result they want, this could be their breakout year.
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