Kitchen’s bigger footprint stepping on designers’ toes
Wednesday, January 18, 2017
Open kitchens continue to grow in popularity. Recent industry reports show a strong consumer preference for completely open or partially open kitchens in both new construction and remodels. With a lot of older housing stock growing in value, some homeowners are using the additional equity to open up their current kitchens, upgrade materials and appliances, and give them a fresher, more contemporary look.
That bodes well for the remodeling industry, of which kitchen remodels are a sizable portion. It may not, however, give a big lift to kitchen designers.
Indicators point to another year of healthy growth for the remodeling industry. Industry experts interviewed for an article for Kitchen & Bath Design News forecast "strong gains," with continued growth predicted through 2019. Among them, Todd Tomalak, a remodeling industry analyst with John Burns Real Estate Consulting, expects revenues from big-project remodeling, including kitchen remodeling and renovations, to increase by 6 percent this year.
Last fall, the Joint Center for Housing Research at Harvard University announced that its Leading Indicator of Remodeling Activity (LIRA) projected that the annual increase in growth in the home improvement and repair sector, which includes remodeling and renovation, would surpass 8 percent by the second quarter of 2017. (An update on the LIRA is due out later this week.)
According to a recent news release, the National Association of Home Builders (NAHB) "predicts that over the new few years remodeling expenditures will continue to grow, but at a more gradual pace." Another positive sign, which appears in Remodeling magazine's 2017 Cost vs. Value report, is that the value of undertaking either a mid-range or upper-scale kitchen renovation continues to exceed the cost — even though the costs of such projects have increased on average over the past year. That gives homeowners an added incentive to invest in updating their kitchens.
As designers well know, kitchen remodels, renovations and upgrades are among the most popular remodeling projects. Zillow's 2016 Consumer Housing Trends Report finds 26 percent of sellers last year undertook a kitchen renovation project in preparation for selling their home. Homeowners intent on staying in their current home for the long run also are investing in kitchen renovations to make them more functional and up-to-date.
Findings from the latest Houzz Kitchen Trends Survey show "nearly 1 in 10 homeowners spent more than $100K on a completed kitchen renovation in 2016 (9 percent), up from 7 percent the two years prior." Tomalak also calculates that about 5 percent of the projected 6 percent growth in revenues in 2017 will come from homeowners spending more on projects rather than from more projects (only 1 percent). With labor shortages continuing to be a challenge, that's a trend that could work in remodelers' favor.
These statistics should be good news for kitchen designers, but as the Houzz study and another conducted by the NAHB reveal, a good chunk of these dollars are going into physically modifying the kitchen space. That is driving more business toward contractors, remodelers and architects.
Behind this trend is a lifestyle shift that has made the kitchen the hub of the household. Whether buying or renovating, homeowners want more open kitchens. When the NAHB asked its panel of professional remodelers roughly what share of their remodeling jobs involved making the main floor more open by removing interior walls/pillars/arches, etc., the median response was that 40 percent of their remodeling projects involved opening up existing homes this way.
NAHB data show that 45 percent of buyers want a completely open kitchen-dining room access, and 41 percent want a partially open kitchen-dining room access. Nearly a third (32 percent) want open access between the kitchen and family room, and 38 percent was partial access.
This trend is reflected in the results of the 2017 Houzz Kitchen Trends Survey. More than half of the respondents (51 percent) opted for opening up the kitchen to allow access to nearby rooms, and more than a third (36 percent) increased the kitchen's square footage as part of the update. One in 5 (20 percent) chose to open the kitchen to an outdoor area.
The remodels require more structural changes, including rerouting plumbing and electrical lines, and replacing or installing windows and doors. That may account for why homeowners are more likely to hire a general contractor (54 percent) than a kitchen designer (25 percent), interior designer (14 percent) or kitchen remodeler (10 percent) to assist with their project.
Compared to last year, homeowners also were slightly less likely to hire a kitchen designer (down 2 percent) and slightly more likely to hire an architect (up 2 percent). The proportions for contractors, interior designers and kitchen remodelers stayed the same.
These statistics reflect past consumer behaviors. They don't predict future ones. However, the preference for more open spaces means current market conditions are likely to remain the same or similar in the year ahead.
Thus, kitchen designers should benefit from the overall growth in remodeling and renovation activity but probably will not see a spike in growth compared to last year.
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