With more than 27 million full basements and 9 million partial basements in the U.S., according to the Census Bureau, the basement finishing market could fare well in an otherwise slumping economy.
Market research publisher SBI forecasts the basement finishing market to grow 5 percent in 2008 to $23.3 billion and remain at a steady 7 percent through 2012 to $30.6 billion, according to its "Trends and Opportunities in the U.S. Basement Remodeling Market" report released this month.
"Although the data shows that remodeling expenditures are down, there seems to be a number of indicators that showed that might not hold true for basements," said Edna Gabler, author of the report.
For homeowners who decide to expand rather than sell in the declining market, finishing a basement is a good stopgap measure, she said.
Although SBI analysts say it's counterintuitive to expect this market to do well in the current housing and economic downturn, they point to the fact that the basement finishing market had a "compound annual growth rate of 21 percent between 2005 and 2007 (going from $15.1 billion to $22.2 billion) even as the housing market was taking a nosedive and overall expenditures for home improvement declined slightly."
New innovative products in waterproofing, mildew and mold control have lessened homeowner concerns about water issues and are also expected to fuel growth in the market, according to SBI. The emergence of basement finishing systems, such as the one offered by Owens Corning, where drywall and wooden studs are replaced with inorganic system panels, are gaining ground in the marketplace.
"About 98 percent of basement remodeling is still done by drywall and stud companies. But others have emerged," Gabler said.
Water issues need to be dealt with before work on a basement can start, caution experts. There are many companies that specialize in waterproofing basements. Outside drainage issues, often easy to correct, should be looked at first.
Musty and damp smells often associated with unfinished basements can sometimes just be a lack of good air circulation, which would be corrected once the room is finished and ductwork is added.
Experts also advise making sure the remodel of a basement is up to local building codes early in the planning stages. If a bedroom is part of the plan, an emergency escape such as a door or large window will need to be incorporated into the design.
