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The Southern California housing market is poised for growth in 2015. With positive economic growth spurred by higher incomes and low interest rates, the demand for housing and home products and services are being driven upward. See how the top trends will impact your business this year.
Higher existing home sales driving demand for home industry
Existing home sales in California are expected to increase 5% in 2015, with the median price rising 7% to $479,000. Single family resales are one of the key drivers for the home industry because of the significant home improvements made by both the seller and the buyer. L.A. market adults spent more than $18 billion on home improvements last year, and 2.5 million adults plan to make a home improvement this year.
Millennials outnumber Boomers but Boomers dominate spending
Although there are more Millennials than Boomers in the L.A. market, Boomers exert a larger influence on the housing market. 60% own a home, compared to only 33% for Millennials. Boomers are also 43% likely to do a home improvement on their home, spending twice as much as Millennials ($6.2 vs $3.4 billion) in the past year. Millennials, however, are 18% more likely to buy a home in the next year, representing a new influx of homebuyers that home brands will need to attract.
Tax refunds most commonly used to pay bills or big-ticket purchases
As early as February, consumers will start receiving the tax refund they’ve waited for all year. Home projects are a popular way to spend these dollars, whether consumers are remodeling a room or purchasing new furniture. Encourage consumers to invest in their home by providing them with creative home project ideas. Also remind them of the benefits of investing in their home — increased home value, long-term savings, and potential tax credits (i.e. energy efficient windows and doors).
Sources: Home Depot: “Key Trends in Housing Impacting the Home Improvement Market”, Forbes, 1/23/15; , CALIFORNIA ASSOCIATION OF REALTORS®’ (C.A.R.) “California Housing Market Forecast”, Feb 2015; NAHB, “What Homes do Millennials Buy”, 12/8/14; Scarborough LA Times Custom Recontact Study 2014 R2
Categories: Home Improvement