Bob Mundy

Industry Trends

STRITE design + remodel has once again been ranked by the trade publication Qualified Remodeler as among the top 500 remodeling companies in the U.S.  While this is a notable achievement in itself — especially considering that we operate in a much smaller market than most of the other companies in this prestigious ranking — the larger story behind this recognition is something worth sharing for what it reveals about our industry and the environment in which it currently operates.

To gain some insight into the dynamics of the Treasure Valley residential remodeling market, I turned to a veteran of both the upturns and downturns of our industry: STRITE’s president, Bob Mundy.  I asked Bob to characterize and contrast the current remodeling environment with what was happening in our industry just a few years ago.  Whether you are a homeowner who is contemplating a residential remodel, or simply a keen observer of our local economy, his perspective is worth noting.

If the remodeling business is a less volatile place to be since the bursting of the real estate bubble five or so years ago, some credit is due to an overall improvement in the regional economy.  However, this explanation only goes so far.  For one thing, while STRITE has seen its estimated revenue for 2013 improve by roughly 20 percent over the previous year, the pace of economic growth in the Treasure Valley has been far less robust.

From Bob’s perspective, the improvement STRITE has seen in the remodel market can be attributed to five factors that, while they may not constitute a “perfect storm” of business opportunity, at least point to a more sustainable environment in which to continue to do what we’ve been doing for the past 37 years.  In no particular order, Bob Mundy characterizes these factors as follows.

Pent up demand — After a lot of fear and trepidation regarding their economic future, home owners are deciding to no longer put off their home improvement goals.  “People are deciding to live their lives, and they want to genuinely add more value to their homes, and to their experience of their homes.  Folks are just more positive about the future.”

An acceleration of new products and technologies — Not that many years ago, the pace of new products and technologies being introduced into the home improvement market was much slower than it is today.  “We used to wait for five years to entertain new products in the market place.  Now, the quality that is coming out is really exciting to both us and our clients, and we can move forward with much more confidence because of the improved quality of innovations in lighting, materials, colors — things that are really having an impact on peoples’ lifestyles.”

The role of the Internet — In a trend related to the one previously cited, the Internet is fueling an increased awareness of new product and design trends — especially through social media sites such as Facebook, HOUZZ, and Pinterest. “Thanks to the Internet, people are not only exposed to new ideas, but they are able to share them and create conversations around them that add to the ‘buzz’ taking place in our industry.”

The desire to update rather than move — Moving is no guarantee that people will be able to more closely align their lifestyle needs with their homes.  This is especially true if they want to stay in the neighborhood where they currently live.  In that regard, remodeling is an option that allows homeowners to have their cake and eat it too — or at least redecorate it.  “Builders are hard pressed to respond to all the new design ideas that are out there today, so they tend to stick to more generic products and designs.  Remodelers don’t face that constraint.  More than ever, if you want your home to reflect the latest design and product innovations, remodeling is the best avenue.”

Adapting to lifestyle needs — As more people choose to invest in the long term livability of their homes, they are taking a more critical look at how they use their living space.  “We’re seeing less of an interest in adding space through additions, and more of an interest in better using existing space through changes in layout.  This is going to be an even more pronounced trend as the aging ‘boomer’ population increasingly looks at ‘aging in place’ as an option to retirement communities or assisted living situations.”

This last trend points to a broader and more fundamental factor that STRITE believes will contribute to a more sustainable growth in the remodeling business over the next decade: the growing interest in universal design.  “While the new construction industry may continue to experience ups and downs along with the economy, the interest in adapting homes for changing lifestyle needs such as aging in place will be more significant as time goes by.  People will always have an interest in updating the look of their homes, but improving the livability of their homes is a more fundamental investment in value that bodes well for our business.”

For some additional perspective on the Treasure Valley remodeling market, read our blog “The New Normal.”

 

 

 

 

 

Orange

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Trends

While residential design trends may not be as subject to the vagaries of fashion as hemlines, they do change.  Consequently, what is esthetically pleasing today will probably appear “dated” in a couple of decades.  As a remodeling company, the best we can do at chasing the ephemera of “timelessness” is to focus not just on appeal, but on functionality — especially functionality that evolves with the needs of a homeowner over time.

Which is why a recent article in Qualified Remodeler (Actionable Ideas for Universal Design) caught my eye.  If the concept of universal design (aka, UD) is a new one to you, the article’s author offers the following definition: “Universal design simply means inclusive design – thoughtfully filling homes with features that provide comfort and convenience, regardless of age, stature or ability.”

The article goes on to point out that the appeal of universal design has been somewhat muted by its association with “aging-in-place” — a misconception, the author notes, that is best addressed with examples such as the following.

“Let’s say you are building a bath sink vanity. If you built it with an open knee space under the sink with clearance for a wheelchair user, that would be a typical aging-in-place element. However, if you added a removable cabinet front that could convert it easily to a typical sink base with a floor and cabinet doors, that would be a universal design element because it could easily be converted to fit a variety of user’s needs.”

In an effort to “rebrand” UD, a number of industry notables have come together to create Better Living Design, an institute whose goal is to “promote, educate and encourage wide adoption of Better Living Design, the sensible design approach to improve how homes are built and remodeled in America.”

BLD’s mission to “change how homes and the products that go in them are designed, built and remodeled to better meet the needs of everyone at every age, life stage and ability” is an ambitious one, but it has some heavy hitters backing it, including not only the AARP, but more than 30 other organizations, companies, universities, and leaders in the universal design category.

With an aging boomer population that has indicated a strong desire to stay in their homes, STRITE echoes BLD’s observation that “the demand for more livable home design across the life span becomes increasingly more important” — which is why we will be paying attention to BLD and its recommendations to designers, builders, and remodelers.  Regardless of your age, if you are considering a home remodel, we recommend BLD’s website as a resource for ideas on how create a more livable home for any stage in your life.

For a case study on how STRITE approached an “aging-in-place” remodel, click here.

 

 

 

Taupe
Trends

Have you ever wondered just how many ad campaigns and marketing slogans would be rendered mute if you struck the word “value” from the English lexicon?  It’s a tantalizing concept, since it would require companies to be a bit more specific about just what their products and services contribute to the lives of their customers.

Like the words quality and service, the meaning of value has become a marketing cipher into which many businesses expect their customers to apply their own definition.

Which is precisely the problem when applying value to the business of remodeling.  While the concept of value may be a bit fuzzy to many consumers, far fewer have a difficult time defining the term bargain.  And unfortunately for those of us in the remodeling industry, these two words are too often thought of as being synonymous.  As a company that takes great pride in the value that our services represent, we think it’s high time to open up a discussion as to just what that term means.

The idea of “getting a bargain” when it comes to a remodel makes us very uneasy.  After all, there is a reason that so many businesses throw out the lowest bid when it comes to getting quotes for products and services.  There simply is a cost to things below which you cannot go without sacrificing the quality and integrity of materials and services.  The willingness of a service provider to go below that threshold should raise a red flag when it comes to their professionalism and experience.  And while quality and integrity are certainly “value propositions” in our minds, we think these two attributes should be a given for anyone in our business.

A more popular concept of value in recent years has been “return on investment”, or ROI.  In the heady days of the real estate boom, the idea of picking up a property for little or nothing down, upgrading the interior and/or exterior, and then “flipping” the property for a windfall profit was a mighty tempting behavior for a lot of homeowners.  Too tempting, as it turned out.

With real estate prices languishing for the foreseeable future, we think it makes a lot more sense for homeowners to look at where they live as a “quality of life” rather than “return on investment” proposition.  The days of treating ones home as an ATM are long over…to which we say, “thank goodness”!  We encourage our customers to look at a remodel as a process and outcome that adds to their quality of life, and not to their indebtedness!

In thinking of value as something we experience, rather than a “bottom line” transaction, we see value in both the process and outcome of a successful remodel.  And after all, if you reject that idea of value as something material, what you are basically left with is a qualitative definition – one that looks at the experience of the “thing” rather than the thing itself.  In our next blog installment, we’ll talk more about the concept of value as an experience, and just what that “thing” is from the perspective of our customers.

Trends

For those of you who were unable to attend this year’s Remodeled Homes Tour, we wanted to share the story behind the two projects we featured.  Since a picture is worth a thousand words, we thought we’d save a whole lot of pages by simply putting together this five minute slideshow presentation.

You’ll not only see the obligatory “befores” and “afters,” but the “whys and wherefores” as well!

Nari

Having a Home Remodeled? NARI Offers Tips for a Homeowner to Stay on Top of a Home-Improvement Project. The first step to take is pre-planning, which can be started by making two lists about the room that you want to remodel: Things that you like and things that you dislike. Then, write out: Features you […]

Recommendation

Contractor Checklist From NARI

Be sure to look for and be satisfied with these items before signing a contract with a contractor.

  • Was the Contractor/Salesperson on time?
  • Was their appearance neat and professional?
  • Was their vehicle presentable?
  • Did they listen to your ideas, and ask questions?
  • Did they suggest options / alternatives / ideas?
  • Do they have insurance? (Liability & Workman’s comp.)
  • How many years have they been in business?
  • Are they members in any trade or other organizations?
  • Are they certified? (If applicable)
  • Do they have a website for more information?
  • Do you feel comfortable with them?

Download NARI’s PDF version of this checklist here.

From Qualified Remodeler:

RemodelOrMove.com’s U.S. Homeowner Sentiment Report for Spring 2011 reveals that homeowners who are interested in remodeling or expanding their homes have limited options. Of the 5,000 homeowners surveyed, today the average amount of home equity is $106,000 compared to $176,000 in 2009. This trimmed equity is partly due to a reduction in the average home value from $302,000 to $281,000.

If a homeowner moves, the report showed that the new home that meets their needs will cost, on average, $428,000. This is $145,000 more than what they could sell their current home for. On the other hand, the remodel cost estimate is approximately $100,000 to make similar improvements to their existing home. “To remodel or move has always been a difficult decision for homeowners,” says Dan Fritschen, founder RemodelOrMove.com. “This most recent survey reaffirms that both options could cost the homeowner more than $100,000. The calculator on our site can help homeowners to quickly gather information on renovating and moving and then make a recommendation which is best for an individual’s situation.” Fritschen adds that anyone who is considering a move or remodel should work with a real estate agent who can give them three key data points: an accurate estimate of their home’s value, the amount their home could appreciate as the result of a remodel and the price of a different home that would meet their needs.

So, what changes do homeowners want to make if they remodel or move? The Spring 2011 report includes the following data:

  • 57 percent report that they would like to have at least one additional bathroom;
  • 49 percent would like a kitchen renovation;
  • 46 percent are looking for more bedrooms; and
  • 44 percent would like a bathroom remodel.

While home expansion and renovation is on many people’s minds, the majority in the survey reported that they are very satisfied with local schools, their home’s location and neighborhood.  A detailed report is available here.