Expect the best. Prepare for the worst. Capitalize on what comes. – Zig Ziglar
As we wrap up the year and prepare for the next, the State of the Industry issue of Closets & Organized Storage is required reading for anyone in the home organization market. Per Forbes, home renovation spending is expected to decrease from $486 billion to $457 billion in 2024. What does this mean for us? Why is this happening?
It is impossible to discuss changes in the home org market without referencing the pandemic and its influence. In the last three years, we’ve experienced a drastic boom in home improvement. The economy shrank overall during the pandemic, but spending on home improvement and repairs grew. Customers renovated their homes for ALL the things: work, play, school, and, in some cases, additional family members.
Back to my original question: Why? Based on the reading I’ve been doing and my “spidey sense,” I’m seeing three reasons:
1. High and rising interest rates,
2. Lower house appreciation,
3. Decrease in home sales.
What does this mean for us? We should think of this as a leveling off and a return to the demand of 2019. The demand is still there, but customers are more cautious and want value for their money. The spending frenzy of the last three years is unfortunately over. In addition, interest rates are at a premium for those planning more extensive renovations. Home equity line of credits are no longer going for 2.75 percent.
This cloud has a silver lining! High interest rates, high home prices, and low inventories will push people to renovate instead of buying new homes. Material prices are also coming down. So, how do you set yourself up to thrive instead of survive? Show your customers the value your business provides. Join an organization with members ranging from newbies to veterans. Newbies commiserate and share advice about venturing out, and veterans share sage advice. They’ve done it all and seen it all. Get certified, attend webinars, and come to the Closets Conference & Expo. It’s the place to see and be seen in closets and home organization. Now is the time to plan to meet and network April 17-19 in Schaumburg, Illinois. The ACSP provides a unified voice to the industry – don’t miss out on the opportunity to add yours.
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