Home Renovation Expected to Grow in 2015
February 26, 2015
The inaugural Houzz Renovation Barometer, a quarterly index that tracks confidence in the home renovation market among industry professionals, posted an index value of 74 or higher across all company types for the last three months of 2014.
This indicates optimism about a continued industry rebound, relative to the same period of 2013. Confidence in the industry’s recovery continues into 2015, with the Houzz Renovation Barometer posting an index value of 75 or higher for the first quarter.
“With a community of over 25 million monthly unique users, 90 percent of whom are homeowners, and more than 600,000 active home professionals, Houzz is in a unique position to provide unprecedented insights into the health of the home renovation, building and decorating industry,” said Nino Sitchinava, principal economist at Houzz. “Barometer findings are consistent with other leading industry research and economic indicators of growth and confidence for the home improvement industry as baby boomers and growing families continue to invest in their homes.”
The Barometer Study found that the economic recovery reached very small firms in 2014. Overall, revenues are improving for firms of all sizes, many smaller interior designers, landscape professionals, builders/remodelers, specialty trade and other industry firms report aggressive rates of growth (more than 50 percent annually), and roughly a third hired new employees in 2014. Smaller residential architects saw more moderate growth rates, but similar hiring trends.
Improvements were reported in the following areas:
2014 proved to be a year of high single to healthy double-digit revenue growth for the majority of businesses on Houzz. Across all size and professional categories surveyed, roughly one fifth of firms report annual growth rates in the five to 14 percent, 15 to 24 percent and more than 25 percent ranges.
Number of new projects:
Revenue growth was fueled by an increase in the number of new projects, as reported by 70 percent of architects, interior designers, and builder/remodelers and nearly 80 percent of landscape, specialty trade, and other industry firms.
Scale of projects:
More than 60 percent of all firms reported improvements in the scale of projects, in terms of contract dollars per project. Architects were the exception at 49 percent.
The vast majority of professionals are bullish for 2015. Over 80 percent of interior designers, landscape professionals, builder/remodelers, and specialty trade and 70 percent of architects expect revenues and profits to grow this year. That optimism translates to hiring plans, with nearly half of builders/remodelers and specialty trade firms.
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