The remodeling industry is at a crossroads, with skilled labor hard to find and costs and affordability major concerns. At the same time, aging housing stock and growing demand for aging in place and multi-generational living are creating significant opportunities. Lisa Sallstrom, the CEO of the National Association of the Remodeling Industry (NARI), recently discussed the biggest challenges facing remodelers and the opportunities ahead.
Sallstrom noted that the biggest concerns for NARI members are the availability of skilled labor, rising material and operating costs, affordability for homeowners, and economic uncertainty. Despite these challenges, remodelers remain resilient, and demand is still strong. However, consumers are becoming more deliberate about what they spend, making professionalism, trust, and the ability to demonstrate that they can deliver on expectations increasingly important.
NARI is working to help ease the issue of skilled labor shortages by supporting initiatives such as the Home Depot Path to Pro program, which provides free skills training for the construction trades and connects job seekers with construction professionals looking to hire. Sallstrom emphasized that NARI can play an important role in strengthening career pathways and making remodeling a desirable career for students and early career professionals.
Remodeling Industry Trends
These trends are creating demand for remodeling services, and NARI is helping members through education, business resources, and industry partnerships. Sallstrom believes that NARI can help members capitalize on these opportunities while also addressing the threats of affordability, financing costs, and labor availability.
Sallstrom noted that the remodeling industry is fundamentally different from new construction, as it is intensely local, relationship-driven, and dependent on reputation, craftsmanship, and the homeowner experience. While capital can help drive investment in technology and talent, successful consolidation will still require preserving these characteristics that make remodeling businesses successful.
Sallstrom expressed hope that private equity has learned from past experiences and will approach the remodeling industry with a better understanding of its unique characteristics. She emphasized that NARI’s focus is on issues that directly affect remodelers’ ability to operate successful businesses while also improving homeowners’ ability to remodel their homes.
NARI is strengthening its government affairs capabilities to identify issues where the remodeling industry has a distinct voice and can make a difference. Sallstrom believes that this legislation has the potential to create substantial long-term demand for remodeling.
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Technology and Business Growth
As the industry continues to evolve, Sallstrom sees huge advances in technology-enabled businesses and a growing need for professionally run businesses. She believes that NARI can help members understand where technology can create real business value while using it responsibly. Sallstrom also emphasized the importance of building relationships and trust between remodelers and homeowners, particularly in the design process.
NARI is working to build awareness among homeowners and consumers about the value of selecting a NARI member and a certified professional. Sallstrom believes that this can provide a level of trust and code of ethics that all NARI members are asked to abide by, ultimately delivering a better homeowner experience. She noted that homeowners are beginning to understand and realize the value of NARI membership, but there is still more work to be done in getting the brand name out among homeowners.
Sallstrom mentioned that NARI is preparing for its annual conference in April and is looking to add additional benefits to its membership. The organization is also actively looking at addressing the underrepresentation of women and minorities in its membership. Sallstrom emphasized that this is a priority for the organization, and they are exploring ways to attract these individuals to their membership.
NARI’s goal is to stay close to its members and understand the pressures they face, determining where they can provide the most meaningful value. Sallstrom believes that by doing so, NARI can help remodelers succeed in an increasingly competitive marketplace. The organization is focused on providing education, business resources, and industry partnerships to help members succeed.
Industry Expansion and Diversity
According to Sallstrom, the number of remodeling firms has nearly doubled over the last 25 years, with over 128,000 firms currently operating. She believes that this growth is sustainable, but companies will need to think about what it means to maintain a competitive advantage and run their businesses professionally. Sallstrom emphasized that NARI is committed to helping its members achieve this goal and succeed in the remodeling industry.
NARI’s membership currently stands at around 4,000 members, and the organization is actively working to attract new members, particularly women and minorities. Sallstrom believes that this diversity is essential to the long-term success of the organization and the remodeling industry as a whole. As NARI continues to grow and evolve, Sallstrom is committed to building a strong and sustainable future for the organization and its members.
The Homes Act, which was introduced in Congress in October, aims to provide financial liquidity for homeowners to renovate their homes for multi-generational living.