Trends and Opportunities in the U.S. Basement Remodeling Market

Publication Date	November 2008
Publisher	SBI
Product Type	Report
Pages	144
ISBN Number	not applicable
Product Code	SBI00042

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Summary

The basement remodeling market grew 2007-2008 despite slowing economy and housing downturn. And, this niche market segment is projected to continue growing.

Basement remodeling projects face particular challenges - each identified and explored in depth in this new report from SBI. Innovative new products are sparking new trends in this traditional remodel arena.

Trends and Opportunities in the U.S. Basement Remodeling Market provides a comprehensive examination of basement finishing trends in the United States as related to uses, challenges, expenditures, customer base and preferences, and the vendors and products that serve this market.

It examines the composition and strength of the market by looking at the many components that are indicators of its potential size and activity. These components include, but are not limited to, the number of existing homes that have basements, the aging of existing housing stock, home improvement expenditures, homeowner remodeling trends and the average cost of a basement remodel job.

On the basis of these and other data, SBI estimates the size of this market from 2005 to 2007 and forecasts growth from 2008 through 2012 (Chapter 2). In addition, this report discusses in detail major factors that help to explain recent growth patterns as well as those expected to affect the growth or decline of the market through 2012 (Chapter 3).

In the ever-greening climate of thinking, the fact that finishing a basement makes it easier to heat the house in the winter and cool in the summer, which adds up to energy savings, a not insignificant consideration as energy prices escalate. So who are the end users for basement finishing projects and what do they use their upgraded lower levels for? Chapter 7 answers these questions.

Methodology

Report data were obtained from government sources, including the U.S. Department of Commerce, U.S. Census Bureau, U.S. Department of Housing and Urban Development and U.S. Bureau of Economic Analysis; trade associations such as the National Association of Home Builders (NAHB), the National Association of Realtors (NAR) and the Home Improvement Research Institute (HIRI); Harvard Universitys Joint Center for Housing Studies (JCHS); interviews with and websites of home improvement contractors, manufacturers and dealers; industry analysts and print and online business and trade journals.

Consumer demographics and spending trends derive from data compiled by Simmons Market Research Bureau, New York, NY. Each year Simmons surveys a large sample of adult consumers about their buying habits. Simmons surveys, conducted through mail-in booklet questionnaires, draw on a large and random sample of consumers who represent a statistically accurate cross-section of the U.S. population. The Spring 2008 survey cited in this analysis is based on a sample of 24,581 adults representing 112,843,000 households who completed questionnaires over the October 2007 through June 2008 period.

Content

Chapter 1: Executive Summary
- Scope of the Report
- Methodology
- Composition of the Market
- Basements-the Big Picture
- The Aging of the Nations Housing Stock
- Where Are the Basements?-Northeast and Midwest
- Home Improvement Expenditures Track Home Sales
- Basement Finishing Market Size and Growth
- Professionals vs. Do-IT-Yourselfers
- Average Basement Remodel Cost
- Households Remodeling Basements, Attics or Garages Using a Contractor
- Households Remodeling Basements Using a Contractor
- Professional Basement Finishing Market
- U.S. Market Forecast
- Trends Impacting Market Growth
- New Home Sales Plummet
- Existing Home Sales down to a Lesser Degree
- Regional Housing Conditions Support a Healthy Basement Finishing Market
- The State of the Economy
- Modest Real GDP Growth of 1.1% Forecast for 2008
- Experts Predict Downturn in Home Improvements
- SBI More Bullish on Basement Finishing Market
- Basement Improvement Challenges
- Product Innovations
- The Supply Side and Company Profiles
- The Buy Side-The End User
- Young Families Lead the Charge for Finished Basements
Chapter 2: Market Size and Growth
- Methodology
- Composition of the Market
- Basements-the Big Picture
- The Aging of the Nations Housing Stock
- Where Are the Basements?-Northeast and Midwest
- Home Improvement Expenditures Track Home Sales
- Basement Finishing Market Size and Growth
- Professionals vs. Do-IT-Yourselfers
- Average Basement Remodel Cost
- Households Remodeling Basements, Attics or Garages Using a Contractor
- Households Remodeling Basements Using a Contractor
- Spring 2008 Numbers Confirm Trend
- Professional Basement Finishing Market
- Conservative Estimate of the Overall Basement Finishing Market
- Putting Professional and DIY Basement Refinishers Together
- U.S. Market Forecast
Chapter 3: Trends Impacting Market Growth
- The Housing Market and Its Impact on Residential Improvements
- New Home Sales Plummet
- Existing Home Sales down to a Lesser Degree
- Regional Housing Conditions Support a Healthy Basement Finishing Market
- The State of the Economy
- Modest Real GDP Growth of 1.1% Forecast for 2008
- Home Improvement Suppliers Also Suffer
- Experts Predict Downturn in Home Improvements
- SBI More Bullish on Basement Finishing Market
- The Universe of Basements
- If You Cant Sell, Remodel
- The Cocooning Effect
- Young Family Needs
- Product Innovations Make Basement Finishing More Appealing
- Suppliers Are Bullish
Chapter 4: Basement Improvement Challenges
- Water, Water, Water-the #1 Challenge for Basements
- Sources of Moisture and How to Correct Them
- Dehumidify or Moisture Will Return
- Insulation
- Foam-Based Insulation Counters Moisture Conditions
- HVAC Requirements
- Ventilation
- Mechanical Ventilation Top Choice for Basements
- Radon-the Disguised Threat
- Windows-Let the Light Shine in
- Artificial Lighting
- Other Considerations with Artificial Lighting
- Concealing Ductwork and Wiring
- Meeting Code-Check IT out Early in the Planning Stage
Chapter 5: Product Innovations: Fueling Growth in Basement Finishing
- Prevention of Water Intrusion
- Polymer-Based Waterproofing Membranes: Mar-flex Fusion Gray
- Cement-Based Waterproofing: Thoroseal and Thoroseal
- Foundation Coating
- Exterior Foundation Drainage System: Form-A-Drain
- Exterior Foundation Drainage System: Mar-flex Drain-A-Way
- Interior Foundation Drainage System: WaterGuard
- Trench Drain: Multi-Flow
- Diverting Roof Runoff: FLEX-Drain
- Sump Pumps: PeakFlow Pumps
- Ventilation and Humidity Control
- Ventilation: Humidex
- Dehumidification: SaniDry Basement Air System
- Portable Dehumidification: Danby
- Radon Mitigation
- New Construction: Form-A-Drain
- Retrofitting a Basement: HomeAire
- Heating and Air Conditioning
- Ductless Heating and Cooling: Comfort Series
- through-the-Wall Heat Pumps: Wallmaster
- Direct Vent Fireplaces: Monessen Hearth Systems
- Drywall
- DensArmor plus 528
- Mold Defense
- Comfort Guard
- Insulation
- Exterior and Interior Foam Panels: FOAMULAR and INSULPINK
- Fiber Glass: DryRight
- Spray-Applied Foam: Heatlok Soy
- Floor Materials
- Fiberock Brand Aqua-Tough Underlayment
- VersaShield Underlayment
- Endurance Vinyl Plank
- Natural Fusion Vinyl Sheet Flooring
- Rust-Oleum Basement Floor Coating and Stain
- Ceiling Finishes
- Ceiling Panels: Luna ClimaPlus, Cheyenne, and Astro ClimaPlus
- Suspension Grid: DONN Brand AX
- Ceiling Tiles: Metallaire
- Windows and Doors
- Awning Windows: Vinyl by Pella
- Glass Block
- Window Wells: stakWEL and ScapeWEL
- Basement Doors: Ultra Series
- Lighting
- CFL Downlights by Cooper Lighting
- MR 16 and Trac 12 by Juno Lighting Group
- EgressLite
Chapter 6: The Supply Side and Company Profiles
- Owens Corning Basement Finishing System
- Owens Corning Basement Finishing System-the Product
- Franchise Network-the Lifeline of the Business
- Cost and Warranty
- Installation
- Total Basement Finishing (TBF)
- The Total Basement Finishing System
- TBF Basement Wall System
- TBF Basement Floor Finishing
- TBF Basement Ceiling Tiles
- Basement Window and Enclosure System
- Major Competitor
- Cost and Warranties
- Installation
- Impressive Basement Systems
- Impressive Basement Systems Wall Panels
- Ceiling and Floor Choices
- Cost and Warranties
- Installation
- The Basement Tuxedo
- The Basement Tuxedo Wall Panels
- Cost and Warranties
- Installation
- Designer Basements by Temo
- Designer Basements Wall Panels
- Solid-Panel Surface
- Thermal Panel Core
- Panel Back with Built-in Microban Protection
- Panel Attachment System
- Cost and Warranties
- Installation
Chapter 7: The Buy Side-The End User
- Demographics Methodology
- Young Families Lead the Charge for Finished Basements
- Males, Whites and Hispanics Lead in Remodeling
- Those with Advanced Degree Most Likely to Remodel
- Remodeling Diversity among Occupational Groups
- Higher Income Households More Likely to Remodel
- Number of Employed Adults in Household Affects Remodeling Decisions
- Basement, Attic and Garage Remodels Top Priority for Homeowners
- Mixed Picture on Remodeling by Value of the Residence
Appendices
- Appendix A: Resources for the Basement Finishing Industry: Industry, Trade and Educational Organizations
- Appendix B: Resources for the Basement Finishing Industry: U.S. Government Agencies
List of Tables
- Table 1-1: Type of Foundation in 1-Unit Buildings in 2007 (numbers in 000s)
- Table 1-2: Number of U.S. Housing Units 50 or More Years Old (numbers in 000s)
- Table 1-3: Type of Foundation in New One-Family Houses Completed in 2007, by U.S. Region (number of houses in 000s)
- Table 1-4: Total U.S. Home Improvement and Maintenance and Repair Expenditures and Percentage Change, 1998-2008E (in billions of dollars)
- Table 1-5: Average Cost of a Basement Remodel Job by a Professional Contractor, 2003-07
- Table 1-6: Number of Households Remodeling Basements, Attics or Garages with a Contractor, 2003-08
- Table 1-7: Percentage of Households That Remodeled Basements, 2005-2007
- Table 1-8: Number of Households Remodeling Basements with a Contractor, 2005-07
- Table 1-9: U.S. Professional Basement Finishing Market, 2005-07(in billions of dollars)
- Table 1-10: Forecast U.S. Professional Basement Finishing Market, 2008E-2012F (in billions of dollars)
- Table 1-11: Percent of Housing Units Built during or before 1939, by States with a Higher Percentage than the Average for All U.S. Housing Units
- Table 1-12: Remodeling Market Index (RMI) for Selected Quarters, 2001-2008
- Table 2-1: Type of Foundation in 1-Unit Buildings in 2007 (numbers in 000s)
- Table 2-2: Number of U.S. Housing Units 50 or More Years Old (numbers in 000s)
- Table 2-3: Type of Foundation in New One-Family Houses Completed in 2007, by U.S. Region (number of Houses in 000s)
- Table 2-4: Total U.S. Home Improvement and Maintenance and Repair Expenditures and % Change, 1998-2008E (in billions of dollars)
- Table 2-5: U.S. Home Improvement and Maintenance and Repair Expenditures by Type and % of Total, 2003-2008E (in billions of dollars)
- Table 2-6: Average Cost of a Basement Remodel Job by a Professional Contractor, 2003-07
- Table 2-7: Number of Households Remodeling Basements, Attics or Garages with a Contractor, 2003-07
- Table 2-8: Number of Households Remodeling Basements with a Contractor, 2005-07
- Table 2-9: U.S. Professional Basement Finishing Market, 2005-07 (in billions of dollars)
- Table 2-10: Percentage of Homeowners Working Independently (DIY) on Remodeling Projects, 2005-2007
- Table 2-11: Percentage of Homeowners Planning to Hire A Professional for Remodeling Projects, 2005-2007
- Table 2-12: Forecast U.S. Professional Basement Finishing Market, 2008E-2012F (in billions of dollars)
- Table 3-1: Percent of Housing Units Built during or before 1939, by States with a Higher Percentage than the Average for All U.S. Housing Units
- Table 3-2: Remodeling Market Index (RMI) for Selected Quarters, 2001-2008
- Table 3-3: Basement Remodel Cost and % of Cost Recouped, 2003-07
List of Figures
- Figure 1-1: Annualized U.S. New Single-Family Home Sales by Region, January 1997-July 2007 (in thousands of units)
- Figure 1-2: Annual U.S. Existing Home Sales by Region, 1997-2007 (in thousands of units)
- Figure 1-3: U.S. Current-Dollar GDP vs. Real GDP, 2002-08E (in trillions of dollars)
- Figure 1-4: Percentage Changes in U.S. Current-Dollar GDP, Real GDP and the GDP Price Index, 2002-08E (%)
- Figure 2-1: Type of Foundation in 1-Unit Buildings in 2007 (numbers in 000s)
- Figure 2-2: U.S. Professional Basement Finishing Market, 2005-07 (in billions of dollars)
- Figure 2-3: Forecast U.S. Professional Basement Finishing Market, 2008E-2012F (in billions of dollars)
- Figure 3-1: Annualized U.S. New Single-Family Home Sales by Region, January 1997-July 2007 (in thousands of units)
- Figure 3-2: Annual U.S. Existing Home Sales by Region, 1997-2007 (in thousands of units)
- Figure 3-3: U.S. Current-Dollar GDP vs. Real GDP, 2002-08 (in trillions of dollars)
- Figure 3-4: Percentage Changes in U.S. Current-Dollar GDP, Real GDP and the GDP Price Index, 2002-08E (%)