This year has started off strong for WarmlyYours with several core products experiencing significant growth. However, many benchmarks for home improvement spending are projecting continued decreases, albeit at slower rates than initially forecast, throughout the year.
The biggest growth vector for WarmlyYours, in terms of sales volume variation and growth rate, was our snow melting product line which was up over 50% compared to last year.
Despite this positive sign, the national housing and remodeling markets continue to be throttled by low home sales activity and projections of dampened renovation expenditures in the near future.
In this report, we’ll take a closer look at the performance of radiant heating product sales, with a specific focus on snow melting systems, and analyze the impact that the national housing and remodeling markets are expected to have on future sales.
WarmlyYours Product Sales in Q1 2024
The fastest growing floor heating products to start the year were the Slab Heating Cable (up 248%) and the Slab Heating Mat (up 712%). These two product types are embedded in concrete or cement slabs and are most commonly employed during new construction projects.
We also saw some surprising growth rates in a couple of our product lines. Roof and gutter deicing was up 26.9%. These heating cable products are used to prevent the formation of dangerous ice dams along the perimeter of your roof. At first glance, this growth rate may seem counterintuitive given the fact that for most of North America, the 2023-2024 winter was one of the warmest on record. However, periods with high temperature variance can actually exacerbate issues related to ice formation on your roof as rapid freeze and thaw cycles can allow water further ingress under shingles.
Our mirror defogger product line (up 24.4%) also saw significant growth. These heated, hardwired mats are installed behind the mirror and they keep the surface warm to prevent condensation. This can greatly improve your morning routine by keeping your mirror surface usable even if you’ve just taken a shower.
LED mirrors, wall mounted mirrors backlit with long-lasting LED bulbs, were up 12.3%. We will be expanding this product line this year with new sizes of our most popular model, the Audrey. We fully expect to see this product line post positive growth in this quarter and for the near future.
Snow Melting Sales See Positive Growth to Start 2024
Our snow melting products were the biggest driver of radiant heating sales growth in Q1 2024. We saw a massive 56.5% increase in sales of snow melting products compared to last year. Like roof and gutter deicing, this uptick was in contrast to the relatively mild preceding winter. Historically speaking, harsh winters have led to increased spending on snow melting systems as end users (typically homeowners) are more acutely aware of the pain point caused by snow.
However, in the last couple of years, this correlation has become weaker as snow melting sales continue to rise regardless of the severity of the preceding winter. There are a number of explanations for this trend. One reason for increased snow melting system sales has to do with sublimated spending for homeowners, who are not able to “trade up” for a more expensive property because of tight inventory, going into renovation like installing a heated driveway.
But probably the most convincing cause has to do with market awareness of snow melting systems. As more and more homeowners and trade professionals are made aware of snow melting, we’re seeing more and more sales, said Julia Billen, owner and president of WarmlyYours.
“The great thing about snow melting systems is that they are one of the few radiant heating products that advertise for themselves. You can literally see them working!” said Billen. “If a neighbor in a residential community has a snow melting system, it’s going to be very obvious on the first snowy morning and some of their neighbors might be inspired to learn more about the product instead of having to get up in the morning and shovel the driveway.”
To support this, there’s been a 10% increase in homeowner sales of snow melting products year-over-year and a large part of that, as relayed by customer feedback, has been word-of-mouth advertising from either other homeowners or their trade professional that they’ve hired to install their new outdoor surface.
Trade professionals are a critical part of snow melting sales as they often engage in repeat purchases. And developing relationships with these professionals is crucial to ensuring that the products are installed according to best practices and that the end users are able to enjoy their radiant heating system for many years. This is why we’ve developed our Installer Certification Program along with providing 24/7 technical support, said Billen.
“We need to make sure that we’re not only providing the best products to our professional customers but we also need to make sure that we’re providing the best training and product knowledge resources possible,” said Billen. “By doing that, we’re not only improving the radiant heating experience for our professional customers but also for their customers too.”
The most popular snow melting products for trade professionals, ordered by sales volume, were the 240V snow melting mat (up 238.5%) and the 208V snow melting cable (up 115.8%). 240V products are often popular in driveways as you can provide a high square foot coverage with less power load than 120V products. The 208V cable is a popular choice for commercial projects and is often incorporated into outdoor stairs for businesses.
These were followed by the fastest growing snow melting product, our 120V snow melting mat, which was up 769.4%. This product is often popular in residential applications such as walkways or patios.
All of these products that were very popular with trade professionals were a part of our most popular snow melting products in terms of total sales (so including all customers, including trade professionals), however, there were some inversions in terms of the growth rates. The most popular snow melting product was our 120V cable (up 356.5%) which was followed by the 120V mat (up 193.4%). This was followed by the 240V mat (up 111.9%), the 208V cable (up 83.3%), and the 277V cable (up 74%).
From this sales data, it is clear that there has been a marked increase in sales of 120V products. As was mentioned earlier, these products are very popular in residential projects because 120V is often the default available voltage. Additionally, they are typically used for smaller square footage projects since the power draw will be higher per sq. ft. than for other voltages.
We can see that relatively smaller projects are on the upswing so far this year. For example, the most popular (by total sales volume) project-type for snow melting this year has been walkways (up 69.8%) followed by driveways (up 207.6%). Other small project-types like stairs (up 47.8%), entries (up 911.8%), and landings (up 492.3%) were all up.
We do expect to see increases in 208V, 240V, and 277V product sales throughout the next quarter as more commercial and larger-scale residential projects are undertaken during the summer months.
The National Housing and Remodeling Markets
Sales of radiant heating products, like floor heating and snow melting, are tied closely with home sales since a lot of remodeling will take place to either prepare a property for the market pre-sale or to customize the home to the tastes of the purchaser post-sale.
Looking at benchmarks for the national housing market is a bit of a mixed bag so far this year. According to the National Association of Realtors (NAR), by March of this year, existing home sales had fallen 3.7% compared to last year.
"Though rebounding from cyclical lows, home sales are stuck because interest rates have not made any major moves," said Lawrence Yun, the Chief Economist for NAR. "There are nearly six million more jobs now compared to pre-COVID highs, which suggests more aspiring home buyers exist in the market."
Another compounding factor has been increased home prices. According to NAR, 93% of measured metropolitan markets (205 out of 221) saw prices rise on single family homes (compared to 86% last year). Additionally, the national median single-family existing-home price grew 5% during that same time period.
However, not all indications are as bleak. According to NAR, there was a 0.1% increase in pending home sales of single family homes between March 2023 and 2024 along with a 3.4% increase between February and March of this year.
"March's Pending Home Sales Index – at 78.2 – marks the best performance in a year, but it still remains in a fairly narrow range over the last 12 months without a measurable breakout," said Yun. "Meaningful gains will only occur with declining mortgage rates and rising inventory."
Rising inventory may be alleviated in the near future as March 2024 starts of single family homes were up 21.2% year-over-year, according to Reuters. However, this has been inconsistent as the March 2024 total was down 12.4% from February but up 5.7% in April, according to the U.S. Census Bureau. There are certainly financial incentives in place for homebuilders across the country but these have to be balanced against uncertainties regarding potential interest rate hikes in the near future.
According to the Leading Indicator of Remodeling Activity (LIRA), a quarterly assessment from the Joint Center for Housing Studies of Harvard University, they expect to see annual homeowner spending on renovations and repairs to continue to decline 7% by Q3 2024 but this steep decline will soften to just - 2.6% by Q1 2025.
“Residential remodeling is expected to benefit from the rebounding housing market and stabilizing material costs as we move into next year,” said Carlos Martín, Director of the Remodeling Futures Program at the Center. “While home improvement and repair spending is down from pandemic-induced highs, the nation's aging homes continue to need investment in critical replacements, home performance deficiencies, as well as modernization.”
At WarmlyYours, we fully expect to see continued growth in snow melting projects throughout 2024 and into 2025 with a significant uptick in floor heating sales by Q3 2024. The floor heating growth will be driven largely by the launch of our TempZone Floor Heating Ruler Cable, a floor heating cable designed for and available exclusively to professional customers.
Sources:
- Relevant internal sales data from WarmlyYours
- Google Analytics 4
- https://www.climate.gov/news-features/understanding-climate/us-climate-winter-recap-and-summary-february-2024
- https://www.jchs.harvard.edu/press-releases/continued-easing-remodeling-declines-expected-2025
- https://www.reuters.com/markets/us/us-single-family-housing-starts-plunge-march-2024-04-16/
- https://www.zillow.com/research/march-housing-starts-2024-33958/
- https://www.census.gov/construction/nrc/pdf/newresconst.pdf
- https://www.nar.realtor/newsroom/pending-home-sales-ascended-3-4-in-march
- https://www.nar.realtor/newsroom/existing-home-sales-descended-4-3-in-march
- https://www.nar.realtor/newsroom/more-than-90-percent-of-metro-areas-home-price-increase-1Q-2024
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