2016: A Banner Year in Home Remodeling
'More Widespread Growth' Expected in 2017
Most home renovation and design business owners -- at least those who are part of the Houzz, Inc., network and participated in its 2017 State of the Industry -- feel 2016 was one of their best years in a decade, and that revenue and profit growth should continue in the months ahead.
Houzz, based in Palo Alto, Calif., is a leading platform for the home remodeling and design industry, and has 1.5 million active professionals in its "community," Nino Sitchinava, the company's chief economist, said in an exclusive interview with Landscapeonline.com.
More than 4,800 of those people took part in a Houzz survey from Dec. 8, 2016 to Jan. 9, 2017. According to Sitchinava, 600 architects, and the principals of 800 design-build firms and 360 specialty landscape companies were among those who participated in the survey.
A third or more of the survey respondents said 2016 was their best year since 2007. Additionally, two-thirds of the respondents said their revenue increased in 2016, and more than half said they saw higher profits. Houzz refers to 2016 as a "banner year" in its State of the Industry release.
From the responses in that survey and another, its Q4 2016 Houzz Renovation Barometer in which more than 2,200 professionals were asked whether their inquiries, new projects and the size of their new projects increased or decreased, among other questions, Houzz arrived at some conclusions, Sitchinava said.
Much of the growth in remodeling spending wasn't simply because more people renovated their houses, compared to the year before. Instead, home renovation and design businesses saw more homeowners tackling multiple projects at a time, and also embarking on projects that were larger in scope and size. "Many of the 2016 renovations were completed with larger homeowner budgets," Sitchinava said.
Remodeling activity reached a spending peak in 2006 of about $330 billion, according to Sitchinava, who predicts spending in 2016 will be about $350 billion.
"Based on some estimates, residential remodeling in 2016 surpassed the pre-recession peak, and by far outpaced the recovery of the new residential construction sector," Houzz's annual report states. There are several reasons for this expansion, including an aging housing stock, and great numbers of baby boomers planning on spending their retirement years in their own homes.
Home remodeling and design professionals are "bullish" on 2017, and the majority of the State of the Industry respondents "anticipate more widespread revenue growth in 2017 than they experienced in 2016," Sitchinava said.
Businesses expect their annual gross revenue to grow 10-12 percent on average, compared to 8-10 percent in 2016. The majority of the respondents also anticipate their profit to expand in 2017, ranging from architects (57 percent) to specialty building and renovation professionals (78 percent).