How long will tho good tirnes lasl?

t{ow lorrg will the good times last? EMODELING

By Brett S. Martin Assistant Director for Communications National Association of the Remodeline Industry

r!I his vear will mark another record setting year for the remodeling industry. It appears that NARI's forecast that the home improvement market would increase $5 billion to reach $135 billion in 1999 will be exceeded.

Other industry experts are expecting the remodeling industry to surpass the $150 billion mark this year. By comparison, home improvement expenditures reached $108.3 billion in 1993, and nearly $125 billion in 1997, according to the U.S. Census Bureau.

NARI fully expects the growth to continue for the home improvement industry well into the next millennium. Remodeling is, after all, one of America's favorite pastimes. In fact, a Harvard University study found that approximately 25 million Americans undertake some type of home improvement project annually.

The remodeling industry, however, is driven by more than just homeowners' fascination with improving what is generally their biggest asset. A healthy economy, an increase in the number of people owning their own homes, an aging housing stock, and a shift in population demographics all add up to a strong future for the remodeling industry.

With the economy holding strong, and inflation and unemployment rates remaining low, homeowners are prompted to invest in their homes via remodeling. There is also an increase in the number of first time homebuyers as well as people investing in second homes. Homeowners who remodel usually do so within the first 16 to 24 months of buying a home, which will continue to generate business for the home improvement industry. An expected shift in the population, with more Americans moving to the West and the South, will also aid this trend of people buying homes with the intent of remodeling.

Since it is not unusual for remodeling contractors to be booked three to six months in advance at the present time, a sudden shift in the economy would not translate into an immediate slowdown for the home improvement industry.

While the industry is affected, in various degrees, by the economy, it tends to lag behind the economy, sometimes by a year or more. The industry, therefore, is expected to surge in the short-term, despite any minor changes in the economy during the year 2000.

An aging housing stock is, and will continue to be, a driving force behind the remodeling industry's growth. Homes over 15 years old generally require attention. At present, there are approximately 24 million homes in the U.S. between 16 and 25 years of age-prime candidates for remodeling. The average home in America is nearly 30 years old.

Space is becoming a significant factor in some metropolitan areas. With no room left for new construction in some urban locations, homeowners need to remodel current residences to achieve their dream homes. In light of the costs and hassles of relocating, many homeowners would rather remodel their current homes than move into a new one.

With fewer than 1 million remodeling contractors available to service the nation's 120 million homes, the same pool of contractors will be called upon for consumers' home improvement needs.

Homeowners are now demanding more living space. and today's homes are being remodeled to accommodate larger kitchens and second or third bathrooms as well as decks and sunrooms.

More people own their own homes than ever before. Homeownership rates have risen from 557o in 1950 to 64Va in 1990. This increase, coupled with a general increase in the population, has contributed to the boom in the remodeling industry.

NARI expects the home improvement industry to continue to ride the wave of growth. While the economy is responsible for sparking some of the remodeling industry's growth, aging homes, new homebuyers and demographics are also playing major roles. A shortage ofcontractors and a growing demand for their services will keep the industry busy for years to come.