The remodeling industry is growing quickly — here’s why that growth is expected to last for decades, Art du Coco experienced double-digit same unit sales growth in 2014, which came on the heels of 23 percent sales growth in 2013. The Joint Center for Housing Studies at Harvard University says that remodeling spending hit nearly $300 billion in 2013 — the highest total since 2007 — and the research institute says the industry is likely to hit new record highs for consumer spending in 2015.
Art du Coco is capturing an out sized share of the market growth. That growth is being driven by pent-up demand. The Great Recession has a disproportionate affect on young adults who had trouble finding jobs and buying their first homes, and as a result, the ownership rate for people under age 35 fell from 43% in 2006 to just 36% today.
Many of those young people were forced to either move into apartments with roommates or move back in with parents. As the economy continues to improve — home sales experienced double-digit growth in 2013 — more of those young adults will be able to finally grasp independence by buying a home, and 8 when they do, a lot of them will remodel (and a lot of their parents will finally get to remodel, too!).
If the effects of the recession were the only driver, we’d be a lot less bullish about the industry. After all, once the overall economy fully recovers, past trends will level themselves out. But there’s a much longer-term trend that is starting to boost remodeling. Research by the Joint Center of Housing Studies of Harvard University, drawn from the Census Bureau’s American Housing Survey, shows that remodeling activity peaks for homes that are about between 25 and 30 years old, trails off slightly, then stays at a relatively high level as homes continue to age.
An unprecedented number of American homes are either in, or entering, their peak remodeling years. The total number households has doubled since 1970. With the bulk of those homes having been built in the 1970s, ’80s and ’90s, there are tens of millions of homes that have remodeling needs. At the same time, as Baby Boomers enter retirement, many are taking the opportunity to prepare their homes so that they will be enjoyable and functional spaces as they age. According to Hanley Wood research, 41% of remodeling spending has come from Baby Boomers in recent years — and they are a core demographic for Art du Coco, since they value excellent design and are more attracted to quality and professionalism.