Upward Trend Continues for Housing

A modest upward trend continues for housing and the kitchen/bath market, which are exhibiting increased signs of recovery from the worst downturn in decades. Among the key statistics and forecasts released by government agencies, research firms and industry-related trade associations in recent weeks were the following:

The uptrend in existing-home sales continued into early-2011, with January sales rising for the third consecutive month with a pace above year-ago levels, the National Association of Realtors reported last month. Resales in January gained 2.7%, to a seasonally adjusted annual rate of 5.22 million, 5.3% above the 5.09-million level in January 2010 and the first time in seven months that sales activity was higher than a year earlier. “The uptrend in home sales is consistent with improvements in the economy and jobs, which are helping boost consumer confidence,” said Lawrence Yun, chief economist for the Washington, DC-based NAR. “The extremely favorable housing affordability conditions are a big factor, although buyers have been constrained by unnecessarily tight credit.” Existing-home sales rebounded in 49 states during the fourth quarter of 2010, with 78 markets experiencing price gains from a year ago, while most of the rest saw price weakness, the NAR added.

Plumbing, heating and pipe, valve and fitting distributors have reported growth for the ninth consecutive month, posting an 11.1% improvement in per-workday revenue in January 2011, compared to the same month in 2010, the American Supply Association reported. The ASA said that association members are now ahead of the last previous 12 rolling months by 4.7%, adding that inventories have witnessed “robust” growth of 4.4%, while inventory turns and employment conditions continue to improve. “The PHCP industry recovery is clearly gaining, as most distributors continue to report improved profitability as compared to 2010, the Chicago-based ASA said.

Domestic shipments of major home appliances improved in February compared to the same month a year ago, according to the Association of Home Appliance Manufacturers. The Washington, DC-based AHAM reported last month that February appliance shipments totaled 4.75 million units, up 6.5% from the 4.46 million units shipped during February 2010. Declines, however, were reported in most major product categories, including cooking, kitchen cleanup and food preservation appliances, AHAM said.

Sales of kitchen cabinets and bathroom vanities slid in January, following the pattern of the past few years, the Kitchen Cabinet Manufacturers Association said last month. According to the Reston, VA-based KCMA, manufacturers participating in the association’s monthly “Trend of Business” survey reported that overall cabinet sales declined 4.0% for the month, compared to January of 2010. Sales of stock cabinets were down 3.9%, while semi-custom sales slipped 3.9% and custom cabinet sales declined 5.0%,
the KCMA reported.

Market Analysis

NKBA First-Quarter Survey Points To Growing Optimism Among Dealers

Cambridge, MA – Kitchen and bath dealers are entering 2011 “optimistically,” reporting increased showroom visits, sales volumes, remodeling budgets and revenue for the final quarter of 2010, the National Kitchen & Bath Association reported.

The NKBA Kitchen & Bath Market Index (KBMI), which forecasts the confidence of kitchen and bath dealers on a scale of -60 (pessimistic) to +60 (optimistic), was +37 for the first quarter of 2011, up 23 points from the previous quarter, the Hackettstown, NJ-based NKBA said, adding that the KBMI polls approximately 150 kitchen and bath dealers across North America each quarter.

“The KBMI really mirrors a number of other industries that saw improved fourth quarters following several very difficult years,” said Don Sciolaro, chief executive officer of the NKBA. “Hopefully, this is a sign that the kitchen and bath industry (like consumer spending) is on the right path and that the economy is slowly moving towards recovery.” The NKBA said that surveyed dealers reported that showroom visits were up 38% from the previous quarter, and 21% from the same quarter a year ago. Kitchen remodeling sales volume was up 113% and 110% respectively.

Similar gains, and optimistic expectations, were posted for bath remodeling sales volume, as well as kitchen and bath average prices.