2021 Outlook: Home Access Marketplace
on February 24, 2021
Originally featured in “VGM Playbook: Forecasting 2021” by VGM & Associates, Vice President of Live at Home Jim Greatorex discusses the evolution and opportunity of the home accessibility market in 2021. You can access the full playbook here.
In the last three years, we have seen the beginning of the evolution of the home accessibility market. Many new entrepreneurs are entering the market, aging in place is gaining significant consumer awareness, and the global pandemic has increased demand for home safety upgrades. Also, with a new administration comes necessary industry support in enacting positive public policy that will help incentivize homeowners to invest in needed home safety, whether it’s a preventative measure or as a heath incident mandates it.
As we rose to meet the challenges of 2020, there were aspects of the industry that were affected positively and some negatively. For companies who relied on state waiver funding as a revenue source, many states had disruptions in service and did not allow work to be performed in homes for long stretches of time. Many also switched to managed care organizations to administer their benefits, which in most cases was NOT business as usual. The Veterans Administration and workers’ compensation markets have had many services delayed and, in many areas, still do. On the positive side, companies that plugged into the private pay market saw some slow down, but rebounded to a point where most had modest revenue growth.
For 2021, we see a mixed basket of expectations, but mostly a very positive year, with a lot dependent on the continuing pandemic and post-pandemic economy. On the cautious side, we will be watching how states handle their state waiver programs as most will have to cut budgets due to loss of revenue. It’s likely that the first quarter will see the VA and Workers’ Comp business also continue to falter, but when they re open all services, the backlog and new claims will fill companies’ pipelines in no time.
We still believe strongly that the private pay market will show strong growth. The oldest baby boomers will turn 75 this year, and history shows that they are willing to pay for health and comfort. We recommend that all home accessibility companies compete for this business. Over the next nine years, private pay will have double-digit growth.
There is one market segment that is being ignored by most companies. Many contractors go after the wealthy and upper middle-class markets, and much attention is put towards low-income needs, but more focus is needed on the middle class. In the baby boomer generation, there will be 14.4 million people who will be in this income bracket. They likely will not be able to afford senior housing and will not qualify for low-income help. The best solution for this group will be to age in place. If we can capture this market, we will have an amazing opportunity to grow our businesses and perform some really meaningful work in our communities.
The key challenge this year is that we will, in many areas, have more business than we have the depth to handle. With backlogs and increased demand, we see the second half of the year having many companies struggling to keep up with their pipeline of business. We recommend that all members be constantly recruiting.
There are a lot of companies making plays for business in this growing industry, and we want to brand our VGM Live at Home members as a network of customer-focused professionals who can be trusted to bring accessibility and independent housing to people of all ages.
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