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Americans are using discretionary dollars to remodel their homes, here's how

Bill Darcy, National Kitchen & Bath Association CEO, joins Yahoo Finance’s The First Trade with Alexis Christoforous and Brian Sozzi to discuss how Americans are redoing their homes during the coronavirus pandemic, what trend he's seeing in the industry, and much more.

Video Transcript

BRIAN SOZZI: If you spent this summer looking to remodel your kitchen, you're not alone. A brand new report from the National Kitchen & Bath Association finds home remodeling projects surged last quarter. The CEO of that trade group, Bill Darcy, is with us now for an interview you'll see first on Yahoo Finance. Bill, good to see you.

Very much a true story here-- yesterday I finally finished remodeling my kitchen. About a month long project, lots of twists and turns, but one thing that stood out to me through this whole process-- everything was out of stock. So many things that I wanted, months backordered. What is going on out there?

BILL DARCY: Yeah, you know that the supply chain is still kind of ramping back up in a lot of factories closed around the world during COVID. So I think-- I know that our member NKBA member firms are making them as fast as they can.

ALEXIS CHRISTOFOROUS: Bill, what are you seeing? Are people doing it more themselves, those DIY kitchen and bath projects, are they going out and hiring the full Monty and contractors to do it? What do you see, what's the trend right now?

BILL DARCY: You know, it started really with the DIY. I think a lot of people started with that kit and gallon of paint and said, they just-- they're staring at these walls that they don't like and they went out and started that. But most of the people doing any big products are still using professionals. I mean, NKBA member professionals are the ones that we recommend you work with, of course.

But I mean, it's a complicated job-- a kitchen and a bath-- to do. So we're we're seeing, even though the DIY kind of gets it started in a COVID environment, we're still seeing them use this professionals to do those complicated jobs.

BRIAN SOZZI: How stressed is the supply chain? I ordered cabinets-- I never ended up getting them. So I had to cancel that order and go to another place. And I imagine my story is not the only one.

BILL DARCY: No, it's really across the board. I think that we're advising-- our members are advising their customers to order things as early as possible. It's not easy to just start a factory back up again. So, again, I know that they're doing everything that they can, and I just completed my kitchen about three, four weeks ago, so a little head of yours. And thankfully, I was able to order mine ahead of time enough to get the timing.

ALEXIS CHRISTOFOROUS: What does this mean for workers? Are contractors finding it difficult to find skilled workers? And do you think we might actually see a bump up in people entering that field, and perhaps maybe going to trade schools to be part of it?

BILL DARCY: Yeah. The only thing that competes right there with the supply chain is that labor force, the challenge. And we have a next up initiative that really promotes getting young people involved in the trades-- because you know it's a dynamic that is growing demand for remodeling needs more workforce. I do believe that you'll see more people pivoting from other trade positions into our construction and design industry.

ALEXIS CHRISTOFOROUS: But I'm wondering if contractors are finding it difficult to find workers currently. And is that part of the reason why there might be some delays and backlogs in getting projects done.

BILL DARCY: It's definitely impacting. And I think on the front end, it's more just the volume of work is purely very, very, strong right now. But it's definitely right there with that, is trying to find the skilled worker to support the job. It's a big challenge for the NKBA member.

BRIAN SOZZI: What's the average cost to remodel a kitchen? Going up and down the aisles, you search online-- obviously I'm not checking these things on my calculator. But, it looks to be a good bit of inflation out there across the board.

BILL DARCY: You know, it's super wide. It really starts with what is your project. And again with the DIY, you can enter into the smallest thing-- it might be paint and then appliances, and maybe countertops, and then you go to the full scale luxury remodel. So it is so wide. I think the interest right now is being driven by, you know, one in ten people are using their kitchen as their workplace.

And you know, you add the dining and vacation restrictions, those discretionary dollars are being put back into the home. So you have tremendous demand right now-- I think 25% of the people we surveyed said they want to remodel soon. And we have an increase in 17% from Q1 to Q2 on remodeling, so there's so much going on right now in our industry and I think the pipeline will be full through 2021.

BRIAN SOZZI: You also lead the-- or, are responsible for, the Annual Kitchen and Bath Show. From what I've seen, that's taking place in early 2021. What are you seeing in terms of exhibitors coming in? What are the top trends in kitchen remodeling that we might see?

BILL DARCY: You're seeing a lot of tech and a lot of healthy living. I think those are the two top things right now. You know, healthy living was a pretty strong trend before COVID hit, but now you have touchless faucets, anything anti-microbial. All the things that you would think to keep your home clean.

And then technology has really entered our lives in so many ways. Here we are doing this technologically, and just with homeschooling and work from home, how your appliances are connecting to your WiFi, and all those things that can make your home run better and smarter using technology.

ALEXIS CHRISTOFOROUS: Sticking with the trends, I'm curious what countertops are popular right now. We've gone through lots of different phases, we know the granite-- speckled granite-- was big for a while. What are you seeing right now?

BILL DARCY: Quartz is still the leader it's been for a few years. Granite held strong for a long time, but-- a lot of those surfaces that are easy to clean, easy to maintain, but are strong and tough and provide those beautiful solutions for great projects. So we see quartz really still holding its own as the number one countertop material.