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In this Issue

Home Starts: Little Change From Last Year

Full Speed Ahead: Outdoor Living Continues to Thrive

Innovative Hearth Products Launches New Brands Websites

Agio Signs Major Las Vegas Lease

Home Starts:
Little Change From Last Year


From Builder Pulse

Monthly figures on U.S. home-construction starts make the industry appear bipolar: down significantly in March, up big in April and down again in May.

The reality is, when the focus is broadened to the first five months of this year, home starts have exceeded last year’s tally, although the growth has slowed considerably.

Tuesday’s headlines noted that housing starts in May were 6.5 percent less than a month earlier. However, the Census’ monthly figures are subject to volatility and substantial revisions. You can get a more reliable picture at this point by examining year-to-date figures, which include most of the spring season.

Consider that, for the first five months of this year, builders started 396,000 dwelling units, not adjusted for seasonality. That’s up 6.6 percent from the same period last year.

Factoring out the fast-growing multifamily sector, you still get a 2.5 percent increase in single-family home starts in this year’s first five months (255,600) over the same period of 2013 (249,300).

“When we look over several months to smooth out that volatility, construction clearly is recovering, especially on the multi-unit side,” said Jed Kolko, chief economist for real-estate website Trulia, referring to apartments and condominiums.

Kolko added that, over the past three months, construction starts for both multifamily and single-family exceed the year-ago tally by 10 percent.

The reasons that the new-home market has slowed to smaller gains this year from rather strong gains last year are well chronicled. Chief among them are rising home prices and interest rates. Even so, many analysts still forecast gains in starts and sales for this year.

“I still maintain my belief that we’re going to have continued increases in housing starts on a trend basis through the rest of this year and into next year,” said Brad Hunter, chief economist for home-building research firm Metrostudy, part of Hanley Wood.

Metrostudy forecasts one million home starts for 2014, an increase of nearly nine percent from 2013.

Scott Laurie, president and chief executive of Southern California home builder Olson Co., anticipates selling 30 percent more homes this year than last year. However, much of that is due to the builder starting new projects. On a per-community basis, which is akin to retailers measuring sales at individual stores against their year-ago numbers, the builder’s sales are flat with its totals from last year.

“For us, the best way to quantify it is that we’re doing just as well as we did last year,” Laurie said. “And last year was a very good year.”

Visit the website.


Full Speed Ahead:
Outdoor Living Continues to Thrive


During a period of tremendous growth over the past 10 years, the outdoor living trend turned a corner from what some considered a fad into a permanent fixture of the American lifestyle.

While retail spending continues to scratch and claw its way back to pre-recession levels, research into new home building and remodeling trends, social factors, demographics and technology advancements indicate a strong future for the outdoor living category.

New and Existing Homeowners Drive Growth

More than half of all residential architects believe outdoor living features play a more important role in new home sales now than just two years ago. In fact, 63 percent of architects report that outdoor living spaces are the most common “special function room” in home construction. While new home deck-versus-patio construction varies substantially by geography, today more than half of all new homes are built with a deck.

Yet, new homebuyers aren’t the only ones requesting outdoor living spaces. According to the 2014 Houzz & Home Study, more than a quarter of homeowners are staying in their homes longer and plan to remodel or enhance their outdoor space.

It’s well known that home buyers (whether buying a new or existing home) tend to spend more on appliances, furnishings and property enhancements during the first two years after closing on a house in comparison to non-moving owners. Outdoor living furnishings, and especially outdoor furniture, are often a part of new mover purchases. Casual furniture, particularly dining sets and conversation groups, are the most common outdoor space purchases.

Casual Furniture Particularly Strong

All outdoor living categories have fared well over the past 10 years, and sales of outdoor furniture have been particularly stunning. Now at about $4 billion in sales, the category’s over 50 percent growth is well ahead of every other furniture category, including sofas, chairs, bedroom, dining and entertainment furniture.

Numerous Factors Drive Outdoor Living Popularity

There are many other factors that continue to increase the popularity of outdoor living, including technology. With the growth in mobile technologies – smart phones, laptops, tablets and e-readers – consumers are no longer tethered to heavy products and cords, making it easier to take electronic entertainment outdoors. Other technologies extend the outdoor season, like radiant floors that keep outdoor spaces from freezing, and other innovations in shelter such as heavy outdoor fabric walls.

There is also a diminishing distinction between indoor and outdoor furniture and accessories, encouraged by media influence and companies that offer stylish and durable all-weather products. Articles and images from blogs, magazines, Pinterest and Houzz consistently feature stories about marrying the functions of indoor and outdoor spaces and focusing on transitional design elements to bring the outside in and the inside out. These stories are in addition to the tried and true topics of al fresco dining and throwing the perfect backyard party.

These influencers are working: Furniture Today reports female shoppers list the Outdoor Room as the third major area of the home they want to furnish, just behind the family room and bedroom.

With its appeal to both new and existing homeowners, and influencing factors including the evolution in technology and the increase in media coverage, the future looks bright for the world of outdoor living.

– Kent Panther
Senior Vice President
Wray Ward

Kent Panther has worked in insights, strategic planning and marketing communications for 25 years. Client experience includes work with Hunter Douglas Window Designs, Lowe’s, Mohawk Flooring, Rheem Gas Furnaces, Springmaid Home Fashions, Sunbrella and VELUX Skylights.

Before joining Wray Ward, Panther worked on brands including Michelin, Mr. Coffee, McDonald’s Restaurants and Coca-Cola. A graduate of Miami University in Ohio, he earned a B.S. degree in business with a major in marketing. He is originally from Louisville, Kentucky. Email Kent Panther.


Innovative Hearth Products
Launches New Brands Websites


Innovative Hearth Products (IHP), previously known as Lennox Hearth Products and FMI Products, recently unveiled three new, high-tech websites, one for each of the company’s new primary brands, Astria, IronStrike and Superior. A new corporate website for IHP was also created and announced. The new websites were developed to assist hearth dealers, design-build professionals and consumers in making well-informed decisions about their upcoming fireplace, stove and insert purchases.

The retail brands, which were introduced January 2014, have been trademarked as Astria, which features stylish and technologically-advanced indoor and outdoor fireplace systems, and IronStrike, comprising energy-efficient stoves and inserts. In addition, a brand name under which the company’s hearth products are being marketed to the design-build industry is Superior.

Retailers and consumers can visit the Astria website and the IronStrike website for a comprehensive overview and well-cataloged list of product offerings in distinct selling categories. The Superior brand website, is specifically geared for builders, designers and remodelers to learn about a diverse range of home-heating products for their mass-residential or hospitality design-build projects.

All three websites contain specific information and photos of products and available accessories. Videos about Astria and IronStrike are also featured on the websites, enabling customers to learn intimate details about the various brands and their products.

Each website incorporates links to dealer locators, press coverage and tech support. The prominent navigation bars and clean layout of the sites makes them user-friendly for the company’s varied customer base.

With the newly-activated websites, IHP is in the process of executing a strategic marketing plan designed to communicate Astria, IronStrike and Superior branded product information to its direct customers as well as to support their efforts in marketing IHP hearth products to homeowners and others.

The new websites were launched as part of IHP’s strategic initiative to streamline and restructure its product lines, following the company’s fall 2012 acquisition by the Comvest Group, which included the merger of Lennox Hearth Products and FMI Products.


Agio Signs Major Las Vegas Lease


Leading outdoor furniture manufacturer Agio International has signed a lease with, and will be a part of, the Las Vegas Market starting in July 2015. This long-term lease will find Agio International anchoring the 12th floor of Building C in a new 22,000 sq. ft. showroom as part of the Casual Furnishings category launch.

Agio will begin build-out and make substantial upgrades in the physical space, including reconfiguring walls to improve the sightlines and make a prominent statement to visitors arriving on the 12th Floor. The display space will feature the same assortment of collections in Agio’s current 19,000 sq. ft. gallery in Chicago.

“This new showroom will help us reach an incremental retailer base that does not attend category specific shows,” said Bob Gaylord, president of Agio-USA. “Las Vegas Market attracts the traditional furniture and lifestyle stores, Big Box, catalog and internet retailers, which aligns with our future growth plans. We currently show in High Point and Chicago’s Merchandise Mart to target these channels, but the Las Vegas Market will allow us to grow our business even further.”

Agio has long been recognized internationally for its impeccable attention to design trends coupled with superior service. Retailers have access to improved margins and profits by offering value, quality and selection to customers nationwide.

Agio-USA is celebrating its 25th year in business in 2014. As the largest outdoor furniture supplier in the United States, Agio offers unmatched selections of  dining, deep-seating and chat group collections made from extruded and cast aluminum along with all-weather wicker sets. Agio continues to lead the way with outdoor fire, a category it ignited years ago with its legendary portable gas fire pits.

In July 2015, Las Vegas Market will launch 250,000 sq. ft. of fully built-out permanent showroom and temporary exhibit space on the 12th and 13th floors in Building C, devoted solely to the casual/outdoor category.

“With the timing of our summer market lining up perfectly with the sales cycle of this growing segment, we wanted to set our partners up for success and launch these new floors when we were able to make the most positive impact. We’re committed both organizationally and financially to the success of our partners and want to give them a platform for future growth,” said Craig Staack, vice president of home furnishings leasing for International Market Centers.

The Summer 2014 Las Vegas Market runs July 27-31, 2014, at World Market Center Las Vegas. Visit the website.

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