There could be a number of reasons for the recent jump, but according to an article in the Austin Business Journal, home remodeling has risen to its highest level in seven years.
Figures released indicate an increase of 22% in May from a year ago which marks 19 straight months of gains. These numbers put home remodeling levels at their highest since Buildfax started tracking these figures in 2004.
This bodes well for construction workers who hitherto fore have been gainfully employed building new homes. With the decline in housing starts home improvement projects will certainly help to put some of these contractors back to work.
Joe Emison, vice president of research and development at BuildFax calls it a “bright spot” in an otherwise struggling environment. His observation is a positive one that home owners are looking to upgrade their current homes rather than purchasing a new one.
NAHB’s Chairman, Bob Nielsen also expressed optimism over the recent increases with hopes that this activity will continue to climb based on the current trend.
But, what does this say about the economy, in general – and more specifically about the housing market?
Are potential home buyers throwing in the towel on the possibility of selling their homes and trading up as has generally happened in the past? This may or may not be the only cause for the uptrend in home remodeling.
As we have readily observed over the past few years, home buyers have become extremely particular about the houses they will even consider for purchase. While there was, at one time, a strong market for low-cost “fixer-uppers” those times have long since passed. These days, the only people interested in buying a home that needs work are investors who intend to renovate and flip for a profit.
Today’s home buyer is not necessarily willing to invest in “sweat equity” since there are so many homes on the market right now that are not selling. Why buy a home that needs work when you can hold out for one that is already in move-in condition?
I was recently asked by friends who are contemplating the sale of their home if I recommended that they sell as-is or make repairs and improvements. My best advice was to definitely improve their home, within reason. Buyers are just not considering the homes that need TLC (tender loving care) right now. They are, and can be, more discerning than that.
Could this then be a large part of the increase in the home remodeling figures - owners who are considering selling their abodes but are wisely advised to indulge in some remodeling prior to putting it on the market?
This may not be a question of home owners who are fearful and planning on staying put - but rather to renovate, sell and move up.
We can only hope.
Copyright 2011 "Home Remodeling on the Upswing - Is it a Good Thing?"
This post was written by
Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230
An Exclusive Buyer Brokerage serving the Greater Metrowest area
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