Remodeling Forecast for 2013

"Right now a lot of us are doing pop-up rooms above garages," said Bob Hanbury past chairman of NAHB Rebuilding Committee. "There's lots of pockets within a home where you can create 10-foot by 10-foot rooms."
Courtesy of Larry Shield

A panel of leading remodelers and industry experts discussed current remodeling market conditions and the outlook for this sector. Local and national remodeling market data and trends were highlighted at the National Association of Home Builders' Show in Las Vegas on Jan. 22.

"Future activity has show more improvement, above the tipping point at 50," said Paul Emrath, Vice President for Survey and Housing Policy Research, NAHB. "The Remodeling Market Index for the fourth quarter of last year was at 55. Calls for bids were at 59 and appointments for proposals at 59. The strongest sector was requests for bids."

Emrath said there's been regional effects, too, especially in the Northeast. Due to Hurricane Sandy, the remodeling forecast went from 40 to 61 in the fourth quarter in New England.

"The forecast is for slow and steady growth as we go forward," said Emrath. "There's still pent up activity out there."

Bob Hanbury past chairman of NAHB Rebuilding Committee, who works in Connecticut, said he's looking forward to insurance claims on the hurricane, to keep his business going this year. Most firms have found maintenance and repair work.

"Right now a lot of us are doing pop-up rooms above garages," said Hanbury. "There's lots of pockets within a home where you can create 10-foot by 10-foot rooms. So a pop-up is an easy way to create space.

The additions market seems to be clearing its way back. Kitchen remodels don't have all the amenities they had in the past.

Late in 2010 the bottom dropped out for Bill Shaw, owner of William Shaw & Associates in Houston. He said the state suffered this recession for two years. His firm has been in survival mode for the past three or four months.

"For the past three or four years we've had a steady amount of calls for bids," said Shaw. "There's lots of interest, but not seriousness when they find out the cost. Price sensitivity in the market place is still out there."

Shaw said the time it takes from a lead to a bid to design and construction of the project has been taking three times longer than the normal four to eight month cycle, due to price sensitivity. If companies didn't properly brand and market themselves, they went under.

"Cycles are what happens in business," said Ben Morey, owner of Morey Construction Inc. in Signal Hill, Calif. "For instance, every four years, I can anticipate the phone stops ringing two weeks prior to election. Everyone has this 'Let's see what happens mode' even though the election won't change anything."