Growth of residential re-siding business continues strong, is now over $t.7 billion

by Charles S. Houser Market Manager, Repair & Remodeling Hardboard Div., Masonite Corp.

I AST YEAR. approximately l-lla f- milUon American homes were re-sided, up from slightly over I million in 1974 and 850,000 in 1970. Except for the recession year of 1973, the residential re-siding market has shown steady growth over the past six years.

The 1-ll4 million U.S. homes resided in I 97 5 translated into a re-siding market last year of over $1.7 billion chalked-up by building materials dealers and home improvement companies.

According to market research conducted by the Masonite Corp. this lucrative market will continue to grow, with an estimated 1.33 million American homes slated for re-siding in 1976 and over 1.5 million by 1978. Dollar volume of siding sales for residential rehab is projected at over 1.9 billion this year and more than 2.5 billion by 1978.

It's a matter of simple arithmetic. Each year, the number of existing older homes continues to increase. As they age, more homes need re-siding to maintain their value.

Dealers who recognize this growing profit potential are aiming at both segments of the re-siding marketl installed remodeling and contractor sales.

Dealers Expand Remodeling Services

Although the do-it-yourself market is showing the biggest growth in building materials sales, dealers and home improvement centers (both chain and independent) are recognizing the profit potential in installed remodeling and are expanding these services to offer consumers an option to the doit-yourself approach.

About 3O% of all conventional building materials dealers are active in the sale of installed remodeling, using either their own crews or subcontractors. And nearly 7O% (or 3,000) of these dealers actively promote the sale of installed roofing and siding.

For example:

Lowe's has expanded its "Improvers" installation service to 80 stores this year, almost twice the number of stores featuring this service last year;

. Wickes' "Installed Service" is now available in all of the chain's units;

. Busy Beavers Remodelers, Inc. now operates from 14 of the 15 Busy Beaver Building & Home Centers in western Pennsvlvania:

Story at a Glance

Residential re-siding market continues steady growth. . a 1.5 million home market by 1978. about 30% of all conventional building materials dealers are active in installed remodeling.

Traditional department store and discount chains like Searg Macy's, and Korvette's offer remodeling services, and K-Mart is testing the concept through subcontractors in the Miami area.

Dealers like these are also aiming at a bigger slice of the contractor market. Masonite market research points out that there are 30,000 professional remodeling contractors in the U.S. About two-thirds (or 20,000) of these contractors report that siding is their biggest dollar volume job.

Masonite surveys reveal that 19% of metropolitan residers and 32% of residers in rural areas purchase their material through a retail dealer, showing plenty of room for growth of dealer sales in this segment of the market.

To help dealers cash-in on the growing re-siding market, Masonite has launched a multi-media merchandising campaign designed to stimulate residing traffic from both contractors and consumers.

The re-siding program features Colorlok lap siding, a hardboard siding with a factory-bonded finish.

According to our research, the average re-siding job takes 15 squares (1500 sq. ft.) of siding. With Colorlok, the average siding sale would thus total over $900, and if installed, over $2,700. This would return a gross dealer profit of approximately $260 on material alone. and $1000 on the sale if installed.