In this week’s episode of the Top of Mind podcast, host Mike Simonsen is joined by Block Renovation CEO Julie Kheyfets. The duo explore current and upcoming trends in the home renovation market.
This interview has been edited for length and clarity. To start the conversation, Simonsen and Kheyfets dive into what Block Renovation offers to homebuyers.
Kheyfets: We help homeowners find the most trusted place to plan and hire for major renovation projects. You think about major bathroom remodels, kitchen remodels, whole home remodels, and that’s where we focus. The renovation space is so fascinating. It is a $470 billion dollar market. Despite that, most people still have a really challenging experience.
Simonsen: Where does the artificial intelligence (AI) come in?
Kheyfets: As we watched AI emerge on the scene over the last couple of years, what seemed really natural in the renovation space is to use AI to tackle all these problems of information.
When I say problems of information, that’s things like trying to figure out how much would it cost to go and finish my basement. AI can deeply understand your space and vision, and give you guidance that’s personalized to your needs on things like design, the scope of work and the actual costs.
Simonsen: One of the things we do on this podcast is seek unique datasets that we can understand. Do we have other things we can look at in the data
Kheyfets: We are seeing very interesting data on demand. We’re still in January and we are seeing demand up significantly, even starting from the last couple of days of Q4 and heading into Q1.
Now, Q1 is usually the highest in terms of renovation demand across the year. This year, we’re seeing Q1 demand actually higher than it’s been the last couple of years — about 25% higher than 2024 and 2023. And it’s beginning to approach 2022 levels. And if you remember, rates were very different in Q1 2022.
Simonsen: What’s the dynamic that’s driving renovations up when the cost of money is up as well?
Kheyfets: One is home sales, the world in which you live. When home sales are up, renovations go up, because more people buy a home and they want to adapt it to their needs. The opposite is true when sales are down.
The other thing that happens which might not be as intuitive is substitution. The reason for that is they can’t move to a new home, so they are almost forced to evolve their existing home to their needs.
The rest of the conversation covers specific aspects of home renovations. But Simonsen and Kheyfets also explore the impact of labor changes and tariffs on the industry.
Simonsen: Tell me if you have any insight or view on both the labor and tariff situation. What’s the conversation happening in renovation?
Kheyfets: In the current conversation, there’s been a discussion of immigration, and there’s a real question about the scale of change in terms of restricting immigration. Also, what kinds of immigration are we talking about? Where we are focused is trying to drive efficiency for contractors so they can focus on doing what they do best.
