Loghome Circ Ad Top Left

Housing Demand Predictions and Hot Updates from Design & Construction Week

An update on the latest industry news from Design & Construction Week’s tenth anniversary event in Las Vegas.

This content is sponsored by The Unico System.
Oscar Einzig Photography, courtesy buildersshow.com
By Peter H. Miller Hon AIA, President, Home Group, Active Interest Media
Like New York’s Time Square on New Year’s Eve, Design & Construction Week’s tenth anniversary event in Las Vegas this month attracted a sea of humanity from around the world. Two-hundred thousand people descended upon five big, contiguous trade shows which covered 1,000,000 square feet of exhibits. These five design and construction events include the International Builders' Show, the Kitchen & Bath Industry Show, the International Surfaces Event, the National Hardware Show and the Las Vegas Winter Market for furniture.
Show organizers called this year’s event the largest ever, with 70,000 IBS, 40,000 KBIS, 17,000 NHS, 25,000 TISE and 50,000 LVM attendees who trolled through 1,800 exhibits. The news of a “soft recession due to rising interest rates” caused some large U.S. suppliers to cancel their exhibit booth space. But these companies were replaced by international suppliers from Germany, Japan, Turkey, Canada, Korea and China. I overheard many different languages being spoken.  
There was a dizzying array of education seminars on a wide range of topics, like, “How to Deliver Industry Leading Design at a Lower Cost;” “Single-Family Homes Built for Rent” (a growth market); and “Solving Supply Chain Challenges.”  There were forecast conferences too, “Kitchen Trends: All the Bells and Whistles that Buyers Want in 2023;” “Trends, Forecasts and Key Indicators: What Custom Builders and Remodelers Need to Know;” and a “Multi-Family and Remodeling Outlook” session with NAHB economists.
Of course, speculative home builders need predictions about home-buyer behavior, in order to build what buyers want. High-touch custom homebuilders and remodelers already know; custom-home builders and remodelers already know. Are pandemic behavior trends here to stay? Yes, home offices, media rooms, high tech homes, multi-cook’s kitchens, outdoor kitchens and entertainment areas will continue to trend. And parents! Don’t turn your kid’s bedroom into your hobby room yet. “Adult” children are here to stay, with us.
There was something of everything in these exhibit halls, one million square feet of product displays! I thought, “Consumers are easily overwhelmed by the multiplicity of choice and decisions they must make when custom-building or remodeling. This is why the professionals they work with, be it a builder, architect, dealer, HVAC contractor or interior designer are so important: to guide them through all that’s available, to help the curate and choose.”
There was an outdoor “Show Village” which presented modern modular housing, construction technique demonstrations and construction material exhibits, including Titebond adhesives and Quick House. Back indoors at the Kitchen & Bath Industry Show hall, Kohler stole the show with a toilet display in a bed of roses, a retrospective. I found a mint-green model called “Sunrise,” which was designed the year I was born. Over in the South Hall, a brisk, ten-minute walk away, the National Hardware Show featured several products which were on my Christmas list, like snow blowers and wood chippers.
The Central Hall was for production home builders who value speed, labor efficiency and low-maintenance materials above all else. There was a preponderance of plastic material composite posing as wood. Smaller, custom-made material suppliers were more easily found in the outlying exhibit halls. I did find a wood repair and sealant exhibitor in the plastic pile: Abatron and sister company U. C. Coatings.
Unico Systems had an important presence in the Log and Timber Home Council’s lounge, where they informed custom builders about the space-saving and design-liberating virtues of their small-duct, high-velocity HVAC system. In an NAHB/Wells Fargo Market Index Survey from October 2022, 76% of builder respondents said HVAC was in short supply. Appliances, transformers, windows and doors were cited as even more hard to get.
Back in the press room, I heard the NAHB economists explain that the multi-family construction seen in 2021-2023 hasn’t been so strong since 1972, when baby boomers were entering the housing market. This market peaked with 545,000 units last year, most of them for rent. The high cost of single-family housing and still-short supply is pushing people of all ages to the rental market.
The median price of a single-family existing home is up to $366,900, according the National Association of Realtors (NAR). Prices on existing homes have gone up 130 consecutive months. NAR predicts that 4.7 million pre-owned homes will sell this year, down from 5.1 million in 2022. Here is how this breaks out by region:
  • Northeast: 520,000 sold; median price $391,000
  • Midwest: 1 million sold; median price $262,000
  • South: 1.8 million sold; median price $337,900
  • West: 690,000 sold; median price $557,900
The sales rate of existing homes is a good barometer for future remodeling activity, especially since more than 30% of existing homes are 50 years old or older.  
For new, single-family housing construction, the NAHB reports that the top five markets are in decline: Houston, Dallas, Phoenix, Atlanta and Austin. This is due to rising interest rates, from “3% to 6% which adds $700 per month to a typical home loan.” Last year finished with 999,000 new single-family units built; this year 744,00 are predicted and in 2024, 925,000.
Rural housing continues its upward trend thanks to its affordability and positive impacts on human health. The custom home and remodeling markets are more buoyant than production single-family housing, driven largely by strong home equity and cash buyers. NAHB predicts a 5% increase in residential remodeling market growth in 2023. Log & Timber Home Living magazine's semi-annual Log and Timber Home Production Report estimates 15,000 log, timber and hybrid single-family homes were built in 2022.
This content is sponsored by The Unico System.

Subscribe Now + Get 2 Free Gifts!