For kitchen and bath design professionals, the past 24 months have certainly been a test. Ongoing news reports of foreclosures, rising unemployment rates, decreased consumer confidence and plummeting home prices have created a climate of carefully controlled purse strings, with product shipments down significantly and a great deal of discretionary spending on hold.

As a result, kitchen/bath dealers and designers have seen markedly decreased traffic, fewer leads, longer lead-to-close times, smaller-ticket jobs – often at lower profit margins – and greater competition for customers.

However, there are now some encouraging signs that not only may the worst be over, but that there’s legitimate reason for long-term optimism (see Editorial).

Total housing starts, which descended to historic lows in 2009, are expected to post a modest increase in this year due to a rise in the production of single-family units. While a sustained recovery for housing is expected to accelerate into 2011, as illustrated by the graphic above, the road back to 2006 levels will be long, based on the steepness of the 2007-’09 decline.

According to Don Sciolaro, CEO of the Hackettstown, NJ-based National Kitchen & Bath Association (NKBA), economic indicators and many top analysts contend “that the recession is over – that most markets already bottomed out and are beginning a slow recovery. So, the question now isn’t whether things will get worse,” he says, “but how quickly they’ll recover.”

The extension of the $8,000 first-time home buyer tax credit, signed into law recently, is expected to have a substantial stimulative effect on home sales, and should assist the nation’s housing market on the road to recovery, according to the Washington, DC-based National Association of Home Builders.

The home-buyer incentive extension should boost both housing production and home sales in 2010, according to David Crowe, chief economist for the NAHB. Crowe notes that the latest permit patterns indicate that builders “are preparing for the possibility of more favorable housing market conditions in the future.”