We know what you’re probably thinking when reading this title… We all know what happened in 2020, we don’t need to read more about it.
However, aside from the pandemic, social injustice issues, the U.S. political election from hell, earthquakes and wildfires, there were some events that occurred that weren’t as earth-shattering (literally), but that set a new trend for 2021 and beyond.
Like most small businesses, many of our clients feared how these societal, political, and environmental changes would impact them. Few of them expected the extreme growth they experienced. Businesses in the kitchen and bath industry in particular are still wiping the nervous sweat from their foreheads, wondering how they dodged the same budget that forced many other businesses to shut their doors.
Why Did the Housing Market Boom During COVID-19?
So, this begs the question: During a year when job loss, unemployment, and business failure rates skyrocketed higher than the economic downturn in 2008, how is it that the housing market boomed?
Because quarantine and shelter-in-place orders forced many families to live, work, and school all in the same space, it quickly became apparent that living quarters were no longer cutting it. In fact, according to the National Kitchen and Bath Association (NKBA), homeowners’ needs and issues such as functional space, increasing comfort, and home design flaws quickly became immediate priorities.
A report published by Deloitte Insights highlights three key trends:
1. Higher wage-earners are driving real estate demand. Higher wage-earners in the top 50 percent, who were not financially impacted by the pandemic became interested in new or second-home purchases, which boosted demand and transformed the housing market from a buyer’s market to a seller’s seemingly overnight.
2. Record-low conventional mortgage rates, making home ownership more attractive. Conventional mortgage rates fell below 3 percent for the first time in nearly a decade, sparking a significant increase in mortgage applications between December 2020 and January 2021. Even as mortgage rates begin to elevate slightly, brokers and experts believe rates will remain below 3 percent for the majority of 2021.
3. Millennials entering the housing market for the first-time are increasing competition. With higher wage-earners re-entering the housing market coupled with millennials entering the market as first-time homebuyers, competition became fierce. In many locations spanning across the country, sellers listing single-family homes and properties between $200,000 and $300,000 receive offers above asking prices in a matter of days.
More Money, Fewer Problems
In addition to the reasons outlined above, many individuals and families saved money on common expenses, such as entertainment, travel, and fuel due to shelter-in-place orders. Therefore, many families had more financial resources in reserve for housing upgrades, improvements, and advancements, or even purchasing second homes.
Furthermore, as time goes on, and as the housing market remains in high demand, housing prices will continue to increase. In turn, this means that both current homeowners will have more home equity and sellers will have lucrative funds available for home remodels, advancements, and improvements for the foreseeable future.
Become a Gold-Standard Showroom™ in 2021
All in all, the kitchen and bath industry has 2021 cut out for them. However, with the remodeling industry booming, building materials will also become higher in demand, ultimately leading to an all-around increase in prices and demand for all that you bring to market.
If your kitchen and bath showroom isn’t yet taking advantage of having a predictable, repeatable business development strategy and system for Monopolizing your marketplace through the web, now is your chance to become a Gold-Standard Showroom™ in 2021.
Trust the experts at ShowroomMarketing.com to help your business lay out a strategy that out-performs and out-positions your business over your competitors each and every time.
Take our Gold Standard Showroom Test today and we’ll be in touch with you to review your results and answer any of your questions. http://www.goldstandardshowroom.com/test/
To higher profits, and beyond you go!
~ John Gosselin