What may be a sign of the economy is slowing down overall, a new report released by the Harvard University Joint Center For Housing Studies has released a report that home remodeling is slowing down.
There has been a great deal of investment in properties over the past decade as people have remodeled and added the newest and best gadgets to their homes. The rational is that housing prices were increasing and that homeowners were just adding to the value of their home. But with a slower economy and stagnant or declining housing prices this trend may be slowing down.
Falling consumer confidence and a weakening economy are inhibiting remodeling spending, which is expected to fall by an annual rate of 4.8% through the end of 2008, the center said Thursday. That is steeper than the 2.6% annualized decline the center projected through the third quarter when it last updated its Leading Indicator of Remodeling Activity in January.
The center, which develops its quarterly indicator from government data and surveys, estimates remodeling spending declined 1.7% in 2007.
“Spending on home improvements continues to be sluggish, as homeowners respond to falling home prices,” said center Director Nicolas P. Retsinas. “The fall-off in pending home sales suggests a long and slow recovery.” via Wall Street Journals Development Blog
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This seems to be an obvious reality and new trend…but not so here in Santa Barbara and Montecito CA. With many remodels and building projects costing $400K to $3 Million and lasting 1-2 years…there won't be a slow down here anytime soon.
What we will see is a slow down for the quick bathroom additions or new flooring etc. But those that have money will and do continue to spend.
Well, Santa Barbara is probably the exception to the rule in this case. It's one of those few communities where the real estate and the economy as a whole hasn't slow down as the rest of the country. However, to pretend that this couldn't happen in a near future would be like lying to yourself.
So be aware of the risks the current market presents and assess pros and cons before commiting to your next real estate investment project in Santa Barbara.
A lot of things or necessities should be put into consideration or should be put first in your priorities. Home remodeling requires money. for large families and low income group they cant afford to have this kind of lavishness
On a lighter note,,If you're spending more time in the house these days, as many folks are, improving your home will provide some anti-recessionary joy. And who couldn't use that taste of sunshine these days?
Remodeling during a recession is a risky investment, but if you know anything about investing you know that the risky investments are the ones that you want to make sure are in your portfolio. The value of your remodeling dollar will increase exponentially if you have made wise decisions (decisions that would make your home appealing to future potential buyers) and can be patient enough to wait for the economy to get back on its feet.