Bathroom remodels rebound sharply and are now expected to near 2019 revenue levels. Kitchens are a different story.
By Robert Isler
NKBA has released its September revision of the 2020 Kitchen & Bath Market Outlook. The latest read is encouraging and paints a particularly strong picture for housing in general.
K&B isn’t without choppiness, though, and gets really interesting when diving deeper into a comparison of bathrooms against kitchens. While revenues for baths are now projected to be off a scant 0.5% vs. last year, kitchens are facing a 12% shortfall. A number of factors are at work. With more family members at home, upgrading the extra bathroom has become more urgent. Bathroom remodels also tend to be less costly, are easier to tackle as a DIY project, and with multiple bathrooms in the house, are not too intrusive to undertake. Kitchens, on the other hand, have become Ground Zero for a host of family activities, making a remodel highly disruptive — especially with limited restaurant availability and social distancing concerns still very top-of-mind.
While revenues for baths are now projected to be off a scant 0.5% vs. last year, kitchens are facing a 12% shortfall.
Returning to the macro story, industry revenues have been revised northward to $139 billion, up from $131 billion in the initial revision three months ago. Projections now call for a 6% overall decline from the $148 billion in 2019 — considerably better than most business sectors are faring — and about half the 11.7% shortfall previously expected.
The report, produced in collaboration with industry partner John Burns Real Estate Consulting, draws data from government, industry and internal forecasting sources, as well as survey feedback from more than 1,000 consumers involved in or considering remodeling. It found strength in new construction, expected to be down a modest 3%, vs. nearly 10% off for the remodel market. COVID-19 continues to play an outsized role in the latter, as economic uncertainty and fear of having workers in their homes have led to a sharp increase in smaller, less costly DIY projects. In fact, more than 1 in 3 projects completed in the second quarter were DIY, a 40% increase over Q1. However, urgently changing remodeling needs due to the pandemic, along with a rebound in home purchase applications and a significant increase in housing starts, all bode well for the industry and will be discussed in greater detail over the coming weeks.
