The International Builders’ Show (IBS) and the Kitchen & Bath Industry Show (KBIS) once again combined for the annual Design & Construction Week (DCW) on Feb. 19-21. The Expo drew a total of more than 100,000 attendees to the Las Vegas Convention Center.
More than 67,000 home building professionals from around the world filled the exhibit halls of the Las Vegas Convention Center as NAHB hosted the 75th anniversary of IBS.
As a founding member of DCW, and in collaboration with the National Association of Home Builders (NAHB), KBIS co-located with IBS for the sixth consecutive year. KBIS is owned by the National Kitchen & Bath Association (NKBA). The NKBA is a not-for-profit trade association with nearly 14,000 member companies representing tens of thousands of members in all segments of the kitchen and bath industry.
KBIS 2019 welcomed designers, builders, technology integrators, dealers, and kitchen and bath showroom professionals — and even a little bit of snow — along with more than 600 exhibitors.
Early estimates indicate an increase of 30% attendance over 2018; the sixth consecutive year of attendee growth. Exhibit space for IBS also expanded from last year’s 583,000 square feet to more than 608,000 square feet, where nearly 1,500 exhibitors displayed the latest in building products and technology. In all, exhibitors occupied more than 1 million net square feet of indoor and outdoor spaces. Many of the exhibitors noted the increased foot traffic this year.
“As the owners of KBIS and as an all-industry association, we are committed to producing a show that provides something of value for everyone,” says Suzie Williford, executive vice president of industry relations and chief strategy officer, National Kitchen & Bath Association. “The kitchen and bath industry remains strong. Our most recent NKBA research study expects growth to continue through 2020, so it is imperative that we provide not only a showcase for innovative products but professional development and networking opportunities. Our community of manufacturers, design professionals, technology integrators, showrooms and builders now have the momentum to carry them through the year.”
“As the International Builders’ Show celebrates 75 years, it remains the premier event for the housing industry,” said Geoff Cassidy, NAHB senior vice president of exhibitions and meetings. “With the largest attendance in 10 years, we’re proving once again that IBS is the only place to experience such a diverse collection of innovative products, education sessions and networking opportunities all in one place.”
In addition to meeting suppliers and seeing product demos throughout the three-day show, attendees networked with peers and attended any of more than 130 education sessions led by experts on a wide range of industry topics.
“Everywhere you go at IBS, there’s something to see, something to learn,” said Brandon Hines, owner of Hines Homes in Maumelle, Ark. “The show floor was very impressive, and honestly, a little overwhelming at first because there’s just so many interesting products to learn about and people to meet. But for me, the most beneficial part [of IBS] has been the education sessions. We’re focused on growing and improving our business, and each session we attended provided us [with] specific ideas on how we can achieve that.”
Top features home buyers want for 2019
Laundry rooms and energy-saving features such as Energy Star appliances, windows and whole house certification are among the most wanted home features, according to survey results from the NAHB released during a press conference at the expo. NAHB surveyed nearly 4,000 home buyers — those who have either recently purchased a home or plan to purchase a home within the next three years — ranking 175 features based on how essential they are to a home purchasing decision.
The top 10 features also included home-storage needs, such as garage storage and walk-in pantries, as well as hardwood flooring, a patio and exterior lighting.
Housing trends across the board include a continued decline in the average home size and decreased demand for upscale features such as three-plus-car garages. In 2018, according to information from the U.S. Census Bureau, the average home start declined to 2,576 square feet — down from its peak at 2,689 square feet in 2015 — driven in part by increased production in townhouses, which comprised 14% of new home starts.
“Builders are trying to meet demand where it’s hottest, and that is at the lower price points,” noted Rose Quint, AVP of survey research at NAHB, regarding the increase in townhouse production. “To that end, they are building more townhomes and smaller detached homes. Townhomes take up less land, and that automatically brings the price down.”
Recent trends show new homes have been downsizing since 2016; fewer have four or more bedrooms, or three or more bathrooms. These data “show that builders are trying to respond to the crisis around housing affordability,” Quint added.
NAHB’s survey also includes key information on types and location of homes desired by buyers, including generational differences. Suburbs are the most desirable home location (64%), followed by a rural setting (24%) and the central city (11%). Millennials are the most likely to want to buy a home in a central city (23%), compared to Gen X buyers (11%), baby boomers (8%) or seniors (3%).
Multifamily housing production to start leveling off
While multifamily housing starts in 2018 came very close to the sector’s 2015 peak, production levels are expected to moderate somewhat in 2019 and will stabilize in a range that is considered normal, according to data by NAHB at a press conference held during the expo.
“Multifamily starts will begin to level off through 2019, edging 2% lower this year at about 379,000 units, approaching the level that was the pre-recession norm,” said Danushka Nanayakkara-Skillington, assistant vice president, forecasting and analysis for NAHB. “The great majority of 2018’s units were in buildings with 50 or more apartments.”
While the multifamily recovery led housing out of the recession, the single-family market has not rebounded as strongly. In addition, the rising cost of land and building materials in 2018 and the contraction in the labor force for skilled subcontractors and other construction labor has pushed the cost of a new single-family homes beyond the reach of many young families, many of whom continue to rent.
However, there is growth in single-family rentals — representing 3.67% of the single-family market in 2015, rising to 4.25% by 2017. This growth will take a bite out of both the single-family for-sale sector and the multifamily sector, as young families burdened with student debt, finding it difficult to save for a down payment, opt to rent a single-family home.
Kitchen and bath trends to watch
According to NAHB’s survey, 86% of home buyers prefer their kitchen and dining room to be completely or partially open. Top finishes include stainless steel appliances (67%), granite or natural stone kitchen countertops (57%) and white kitchen cabinetry (32%).
Nino Sitchinava, principal economist at Houzz, shared similar findings from its consumer research for kitchens and master bathrooms.
“White upon white is the new style that is emerging,” she stated — both for the kitchen and bathroom — in terms of cabinets and countertops, as well as gray on white.
Other rising trends include: farmhouse styles incorporating ample amounts of wood; engineered quartz countertops for color flexibility; vinyl and resilient flooring, especially for aging in place; wireless controls, and open interior and exterior spaces in the kitchen; and higher-end fixture installations in the bathroom, such as wall-mounted sinks, faucets and toilets.
Additional details on the NAHB data are featured in the full 300-page report, What Home Buyers Really Want (2019 edition).
Residential remodeling spending continues to gradually grow
Spending on residential improvements will continue to grow over the next two years at a gradual pace, according to experts at a press conference hosted by the NAHB during the expo. Professional remodelers from across the country agreed with the forecast, citing increased consumer confidence and demand.
NAHB predicts that remodeling spending for owner-occupied single-family homes will increase 1.6% in 2019 and another 1.1% in 2020.
“Remodeler confidence continues to remain at a high level, as remodeling spending reached $172 billion in 2018,” said 2018 NAHB Remodelers Chair Joanne Theunissen, CGP, CGR, a remodeler from Mt. Pleasant, Mich. “Although there is steady consumer demand in all areas of the country, the biggest challenges continue to be the costs of labor and materials to meet the interest.”
“We’re not only seeing more requests for proposals, but more home owners are choosing to incorporate aging-in-place design into their homes,” said Thomas Ashley, Jr., CAPS, CGP, CGR, a remodeler from Denham Springs, La. “The older housing stock combined with aging home owners allow growth in that sector of the market.”
“NAHB estimates that real spending on home improvements will continue to grow but at a slow place of about 1.6 percent in 2019,” said Danushka Nanayakkara-Skillington, NAHB’s Assistant Vice President for Forecasting and Analysis. “Factors prohibiting stronger growth include the ongoing labor shortage and rising material prices.”
The Remodeling Market Forecast is updated monthly and available for download with a subscription to housingeconomics.com.
The Showcase for Living In Place brought attention and information to the importance of making all homes accessible, comfortable and safe, regardless of the occupant’s current or future needs or age. A total of 15 presentations were centered on care for veterans, fall prevention in the home and technology for safer living in place. The Living in Place Institute also featured a product showcase featuring Monogram, TOTO, Rev-A-Shelf, Cosentino, Viega and Control4.
The KBIS NeXT Stage, sponsored by HomeAdvisor, programming included 18 panels on a variety of topics including: color trends, women in design, the new modern luxury, innovations in sustainability, wellness and living in place and the integration of design and technology. Panel sponsors included JSG Oceana, Control4, hansgrohe and Kohler.
The NKBA, at KBIS, collaborated once again with the This Old House team, kicking off the 2019 Generation Next philanthropic campaign to encourage and empower young people to join the skilled trades. A panel discussion on Skilled Labor, moderated by Richard Trethewey, led into a Cheers for Trade Careers cocktail and raffle in support of the Skilled Labor Fund.
New this year was the Salon by KBIS, a tented exhibition area located outside of South Hall. The boutique-style space featured exclusive design-forward brands curated by Modenus Media and Design Milk. Along with exhibiting brands, the Salon included the DMMTalks Lounge, KBIS THINK and the Lightovation Pavilion and Lounge, which featured programming with experts in illumination, resources from the American Lighting Association, plus an interactive virtual reality experience.
Size of the kitchen and bath market is $158.11 billion
The National Kitchen & Bath Association released the results of its extensive Size of Market Study and Outlook, revealing a value of $644 billion in sales of products and materials aimed at the residential kitchen and bath market in 2017.
This total includes $330 billion from the construction of new homes and $314 billion from residential remodeling and replacement (R&R) projects. Construction of new houses rose 8.6% in 2017, to reach a market size of $330 billion. Remodeling and improvement of existing homes (i.e., residential remodeling) amounted to $314 billion in 2017. This is 6.4% higher than it was in 2016.
- The U.S. residential kitchen and bath market spiked 7.3% to $158.11 billion in 2017 (for materials only, excluding design and labor costs), surpassing the 2016 spending level of $148 billion;
- At $158 billion, the U.S. residential kitchen and bath market represents one quarter of the entire U.S. residential construction market;
- Overall spending for kitchen and bathroom products is virtually even, with each category garnering 50% of the market (i.e., $80 billion for kitchen products and $78 billion for bath products); and
- Of this $158 billion total, $99 billion (63%) is generated by remodeling and replacement projects in existing homes and the remaining $59 billion (37%) comes from new home construction.
The NKBA 2018-2019 Kitchen and Bath Industry report produces the 2017 market size information for the following:
- By residential market segment: new housing construction; remodel and replacement;
- By product category: 9 kitchen and 12 bathroom product categories;
- A total of 775 surveys were conducted among builders, remodelers and general contractors, soliciting information on their business activities and growth;
- A total of 550 consumer surveys were conducted with individuals who had completed a kitchen or bathroom remodel project in the past 12 months; and
- The new housing projections were calibrated with actual housing construction data and changes in the value of new housing construction. The projections for the remodeling segment were calibrated based on the Joint Center for Housing Studies of Harvard University’s remodeling spending estimates.
Furthermore, the NKBA estimates the U.S. residential construction market will continue to expand in both 2018 and 2019. For 2018, NKBA estimates residential construction will rise to $683 billion, up 6% from 2017. A further 4.8% growth is projected for 2019, bringing the residential construction market to $716 billion.
“Our research reveals the strong position of the kitchen and bath industry, which is particularly significant in times of a fluctuating economy,” said Bill Darcy, NKBA CEO. “This research is an invaluable tool that helps our membership with strategic business decisions, and solidifies NKBA’s thought leadership in the industry.”
Skilled labor shortage still troubling the residential construction industry
The Skilled Labor Fund along with partners the National Housing Endowment, NAHB, NKBA, the National Association of Remodeling Industry (NARI) and SGC Horizon, held a press conference to share ongoing initiatives to address labor shortage challenges in the residential construction industry at the expo on Wednesday, February 20.
Designed to address the lack of skilled labor entering the residential construction industry, The Skilled Labor Fund and select operating committee members spoke to the press about the root causes, current and ongoing challenges and the Skilled Labor Fund’s main priority: To support training and job placement through fundraising efforts.
“Our primary goals are to greatly expand the current number of high schools offering training in the trades and to financially support career fairs that bring together prospective works with trade industry professionals,” said Mark Pursell, CEO of the National Housing Endowment that serves as the administrator of the fund.
Since 2016, the Skilled Labor Fund implemented the Home Builders Institute Pre-Apprenticeship Certificate Training (PACT) program offering classroom and hands-on training in the construction trades. “We have funded 15 schools to date through the Home Building Institute’s two-year post-high school program, and they are all at full capacity. We would like to add up to 40 more schools across the nation by 2020,” Pursell said.
“The current labor force is aging, and it’s the right time to change the narrative at the high school level,” said David Pekel, CEO of the National Association of the Remodeling Industry. “We’d like to work with the school systems so that kids understand what their options are — be it the four-year college track or trade school. The latter generally allows graduates to hit the ground running after finishing their respective programs.”
Throughout the week, the associations hosted events to raise awareness and funds to support awareness of the ongoing challenges the shortage presents to the industry and professions in residential construction. In addition, The Skilled Labor Fund held an event at the Professional Builder Show Village Silver Lot just outside the main convention center doors on Wednesday, Feb. 20. One hundred percent of the $50 ticket price went towards the next generation of skilled labor workforce, and a total of $20,000 was raised for the Skilled Labor Fund. To give to the fund, please visit the Skilled Labor Fund donation page.
The expo returns to Las Vegas Jan. 21-23, 2020. Registration for the 2020 show opens Aug. 1.