Slow-Down in Real Estate Market
Not Slowing Furniture Sales. The real estate market may be slowing down, but there doesn't seem
to be a corresponding slow-down in the number of sales of furnishings
that will go into people's homes. In fact, the opposite seems to be
happening across the country.For instance, California-based Dacor, a
kitchen appliance company, reports that their sales for the first
quarter of 2006 were up some 25 percent from the same period of 2005.
Another kitchen appliance supplier, Pittsburg-based Sub-Zero, saw
their sales jump nearly 30 percent during that same period.What's
driving the startling rise in the home furnishings market? The factors
are complex, but the fact remains that the numbers are definitely
rising, in spite of a softening real estate market. Part of the reason
for the increase is that whether homebuyers are purchasing a new or
existing house, they will spend an average of $6,000 during their
first year of ownership as they begin the task of turning their new
homes into a more accurate reflection of who they are and how they
choose to live.So even in the face of a slowing real estate market,
homebuyers are still spending significant sums of money to upgrade and
furnish their new homes, which makes the home furnishing industry
somewhat less susceptible to downturns in home sales. In fact, the
American furniture industry is actually twice as large as the
country’s music industry overall.However, as is the case in all
phases of the American economy, the home furnishings industry is
facing challenges from increasing competition from globalization. As
more furniture is imported, it becomes more difficult for American
companies to compete as consumer prices continue to decline. That may
prove advantageous to consumers, but it will cause an increasing
number of problems for U.S. furniture companies.
There are several ways American furniture companies are fighting back
against their foreign competition, especially when it comes to
innovation and increased efficiency. After centuries of experience
with American consumers, U.S. furniture suppliers have a firm grasp on
what their clients need and want when it comes to furnishing their
homes.One of the most significant trends in recent years has been the
migration of suburban homeowners back to urban areas.
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