Radiant heating sales have always been tied to the remodeling and housing markets. After all, when you buy a new home, your first step is often to make it your own by remodeling. Often this remodeling will involve the replacement of a floor, which makes it a perfect opportunity to install floor heating.
However, the country has been facing a pretty severe shortage of available housing units—due to the national growth of employment rates and wage increases outpacing a groggy housing market that is still warily shaking off the aftereffects of the Great Recession.
Unsurprisingly, a tightening of supply and an increase in demand has led to soaring prices for available inventory. So much so, that some major metro markets, like Minneapolis, Seattle, Chicago, and Los Angeles, have seen double digit increases in home prices in just a year. According to Zillow and Trulia, these markets are expected to see an even greater increase in home values.
As we compiled our “Second Quarter 2017 Industry Report,” a quarterly publication that analyzes the performance of radiant heating products in the wider context of the remodeling and housing markets, we were struck by the significant increases in sales of radiant heating products, like floor heating systems, in these markets. When comparing Q2 2016 to Q2 2017, consolidated sales of WarmlyYours radiant products grew 66.8% in Seattle, 20.1% in Minneapolis, 19.1% in Los Angeles, and 12.7% in Chicago.
Most of this growth was in electric floor heating systems. Year-to-date, WarmlyYours has seen significant growth in sales of our Environ Easy Mat systems (up 154.3%), which are compatible with laminate and engineered wood flooring. This seems to be related to a surge in consumer interest in laminate flooring types. We also saw an increase in sales of our Prodeso uncoupling membrane that is often combined with our TempZone Heating Cable. This combo is often installed under tile (the number 1 heated flooring type). These items are popular with installers because they significantly decrease installation time and homeowners appreciate the long-lasting uncoupling benefits of the membrane.
We expect these products to continue growing in the third quarter of 2017, especially given the optimistic projections regarding remodeling activity from the Joint Center for Housing Studies of Harvard University. The most recent Leading Indicator of Remodeling Activity (LIRA) from the Joint Center expects annual homeowner expenditures on remodeling projects to reach 310.9 billion in Q3 2017.
“The remodeling market continues to benefit from a stronger housing market and, in particular, solid gains in house prices, which are encouraging owners to make larger investments in their homes,” said Chris Herbert, managing director of the Joint Center. “Yet, weak gains in home sales activity due to tight inventories in many parts of the country is constraining opportunities for more robust remodeling growth given that significant investments often occur around the time of a sale.”
Despite a slight dampening of remodeling activity due to tight prices, we still expect to see continued growth in the competitive metro markets. Home values are projected to steadily increase in Q3 2017 for Seattle, Chicago, Las Angeles, and Minneapolis, which implies that they have not yet hit a point of price saturation. Because of this, we expect to see sales of radiant heating products to grow in these markets between 5% and 10% in the third quarter of this year.
For more information about these findings, check out the 2017 Second Quarter Industry Report.
Guest Blogger Bio: Julia Billen is the president, owner, and co-founder of WarmlyYours Radiant Heating. For nearly 20 years, she has been at the forefront of innovation for the radiant heating industry. Under her direction, WarmlyYours became the first to offer online sales of radiant heating products and the first to develop an online quoting tool for floor heating systems. Billen is an active member of several governing committees and panels for the industry, including the UL Standards Committee, the US Technical Advisory Group, the Flooring Technical Standards and Issues panel, and many more. She can be reached at firstname.lastname@example.org