Last year, Father & Son Construction in Troy, Mich., spread $6.7 million in revenue over 700 remodeling projects, involving 60 or so subcontractors and performing everything from one-day gutter jobs to six-figure room additions. “We can't grow stronger without cooperation,” says CEO Mat Vivona, a second-generation remodeler. “Most of our suppliers work hand-in-hand with us.”
A supplier's willingness to accommodate a wide range of projects from contractors like Vivona, say industry experts, is critical to serving the remodeling market, which should reach $236 billion in spending in 2004, according to the Harvard University Joint Center for Housing Studies. “Suppliers hold the keys to a remodeler's success by helping make the contractor aware of opportunities,” says Rebecca Stahr, ASID, CAPS, of LifeSpring Environs, in Atlanta, a consultant focusing on universal design and aging-in-place building and remodeling.
Today, siding and window replacements, kitchen and bath remodels, and room additions remain the bread and butter of the remodeling industry, most recently confirmed by the 2004 Homeowner Remodeling Survey conducted for the National Association of the Remodeling Industry (NARI) in Des Plaines, Ill. But in addition to the mainstay projects, new niches—from making homes more accessible to finishing basements and attic spaces to create more usable living space without pushing the footprint—are edging their way into the mainstream by virtue of demographic changes and shrinking new-home lot sizes, among other factors.
“Homeowners continue to re-invest in their homes,” says Nicolas Retsinas, director of the Harvard Joint Center in Cambridge, Mass. And not just in older homes: The U.S. Census Bureau reports that improvement expenses for homes built in the past 13-plus years nearly equals the amount spent on homes constructed between 1960 and 1990, fueled primarily by low mortgage interest rates that encourage refinancing to free up cash from equity.
The result is an expanding and profitable market for remodelers—and their suppliers. But even so, “Success today is no guarantee of success tomorrow,” says Stahr. For both contractors and their suppliers, she says, “You have to be competitive in new markets and market yourself as a service, not just a source of products.”
Supporting Visitability More than three-quarters of the 80 million members of the baby boom generation prefer to remain in their current homes as they age into retirement, reported a recent study by the American Society of Interior Designers (ASID), in Washington, D.C.
That statistic places the responsibility directly on the remodeling industry to rework existing homes to be more flexible, convenient, and comfortable—a state of accessibility that Doug Walker, a Denver-based architect specializing in remodeling, calls “visitability.” “Baby boomers don't acknowledge they're getting older and less able,” he says. “But they will discuss [the limitations of] their parents and friends who come to visit.”
The market potential is even more attractive when you consider that retrofitting costs to achieve visitability can run 25 percent or more of the home's value, according to the Universal Design Alliance, a non-profit advocacy group based in Suwanee, Ga., as opposed to perhaps 2 percent when the same concepts and products are incorporated into new-home design and construction.
Despite an already solid cottage market for universal design and the impending tidal wave of need among boomers, Stahr's remodeling clients have so far found access to products and services lacking. “They're frustrated by poor availability and a general lack of information on the supplier's part,” she says. “Remodelers can't do their jobs unless they're supported [by suppliers].”
To incentivize the supply chain to meet the market demand, Stahr encourages LBM operations to look beyond the aging equation and instead at the value and benefits of greater housing comfort and convenience to everyone. “Take away aging, and the concepts of universal design are still valid,” she says.