Remodeling Continues Its Growth Driven by Pent-up Demand
NARI issues its first-quarter 2015 Remodeling Business Pulse
Des Plaines, Ill. – April 23, 2015 – (RealEstateRama) — The National Association of the Remodeling Industry (NARI) released its first-quarter 2015 Remodeling Business Pulse (RBP) data of current and future remodeling business conditions. NARI remodelers are finding a good environment for their services. The combination of homeowner desire for improvements in their homes and a more stable economy is turning into solid business conditions.
Surveyed in March, NARI contractors found their current business conditions better than they were last year at this time. On a 1–9 scale, the average rating was 6.11 (above 5 indicates growth). While still positive, this was a drop from the reading gathered in December. (The change was not a statically significant difference.)
Looking at the sub-components of the current conditions show all show improvements versus the prior year (above 5), but some are up and others are weaker than measured last quarter,
- Number of inquiries was at 6.13, up 0.3%.
- Requests for bids came in at 6.22, up 3.0%.
- Conversion of bids to jobs was 5.76, a 1.4% decline.
- Value of jobs sold fell by 2.5% to 6.14.
Altogether, this data suggests good current growth, but a possible moderation in pace versus that experienced earlier in the year.
Looking at expected conditions 3 months from now finds a dominant proportion (74%) of remodelers expecting growth while only 8% see any level of decline. The balance (17%), see sales being about where they were last year. At a rating 6.46, the outlook for 3 months from now is almost at the highest level ever measured (March 2014 at 6.51).
When asked about the drivers of growth, ‘postponed projects’ continued to lead the way with mentions by 72% of remodelers.
Tom O’Grady, CR, CKBR, President of O’Grady Builders, Drexel Hill, PA, has first-hand knowledge of what is happening in the market. He also has a broader perspective on what other remodelers are thinking as chairman of NARI’s Strategic Planning & Research Committee.
O’Grady says the research results ring true to him. “I see a large amount of interest in work based on pent-up demand. I also hear the same thing from my fellow NARI remodelers. We see this pent-up demand driving the market for the foreseeable future. Homeowners are doing remodeling today for their personal enjoyment or meeting specific needs. While there was a time when decisions were driven by adding resale value, that mindset is largely gone now.”
The second largest growth driver mentioned in the study was ‘more certainty about the future.’ O’Grady’s experience is similar. “Customers are feeling better about where the economy is going, but they remain somewhat cautious. Having short term liquid assets to spend appears to be a driver of when they actually will start a remodeling project,” he said.
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The National Association of the Remodeling Industry (NARI) is a nationwide network of nearly 6,500 member companies and their employees. Consumers may wish to search www.NARI.org to find a qualified NARI professional or call NARI National at (847) 298-9200 and request a free copy of NARI’s brochure, “How to Select a Remodeling Professional.”
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Contact: Steve Carasso
Director of Marketing & Communications