It’s not new news that the economy continues to post reason after reason for serious concern and the stock market has reached the lowest levels seen since 1997. When approximately 10% of all Americans are either in foreclosure or behind on their mortgage (according to a recent release from the Mortgage Bankers Association) and home sales have dropped to significant lows, buying new homes isn’t exactly on the forefront of most peoples’ plans for 2009.
That said, the economic situation is not all bad news when it comes to home improvement. In fact, many folks are deciding that this is the perfect opportunity to stay put and invest in their existing homes. Let’s take stock in how some of the more popular home improvement projects appear to be faring for the near future in sight…
Stock Is Up
It’s a bull market for these home improvement projects.
• Money Saving Home Improvements – As more and more families make the decision to stay put in their existing homes for awhile, the notion of investing in long-term money saving home improvements is becoming even more attractive than ever before. We’re talking about cost effective home improvements like new high-efficiency replacement windows, adding insulation, and installing cost saving mechanical systems. It’s always a bull market when it comes to saving money!
• Kitchen Updates – Bringing new life to a kitchen has always been one of the most appreciated (and most requested) home improvements to have done. In today’s economic environment, single component upgrades are hot-things like a new countertop, new tile or hardwood flooring, and refaced cabinetry. However, pricy and luxurious full-blown kitchen remodels aren’t quite as bullish as they have been recently.
• Green Projects – The ambition to go green is still quite strong all across the country. In fact, it would probably be fair to say that it’s finally just starting to really catch on with the average American household. For reasons that represent both ideals and the respectable money saving benefits promoted by going green, stock is definitely still trending up in being green.
• Outdoor Living – When the economy starts to attack the pocketbook, one trend really starts to become clearly evident-people are choosing to stay home and go out a whole lot less than they previously had. For example, instead of going out for a big meal at a nice restaurant, as spring fever sets in, Americans are choosing to stay home and grill out. Middle-of-the-road new patios and decks promise to be a very popular home improvement this year.
Stock Is Down
Things are looking a little bearish for these recently-popular home improvements.
• Major Home Additions – This will come as no big surprise, but as the stock market touches low levels not seen in more than a decade, big ticket home improvements such as major additions are tapering off too. Let’s face it-people just aren’t willing (or aren’t able to secure the financing necessary) to add a major addition to the home that costs tens of thousands of dollars. Unfortunately, while the stock is down in additions, the timing has probably never been better to complete these projects affordably.
• Major Renovations – Also bearish are full-ahead home renovation projects. One way to look at this downtrend is that instead of investing $60,000 in a brand new luxury kitchen, lately homeowners are sticking to the $6,000 new floor component or perhaps new appliances instead. Where spending was quite healthy not so long ago, scaling back projects to a more practical level is the name of the game in today’s home improvement bear market.
• Home Upkeep – While it’s a scary trend, for the sake of homes and neighbors alike, one facet of home improvement that appears to be more and more stressed (as homeowners are more and more stressed) is basic upkeep and home maintenance. When trying to make ends meet and doing everything possible to keep up with the mortgage, suddenly concerns like keeping the lawn looking great and having someone do minor but necessary outdoor painting end up on the backburner.
Looking At Bankruptcy
These luxurious home improvements are grinding to a halt rapidly.
• New Home Construction – The most substantial form of home improvement, building a new home, is also the most adversely-affected area of home improvement spending with the financial and housing marketing crisis we’re experiencing. With a significant inventory of existing homes available in the real estate market, new home construction has dropped off to the lowest levels ever on record. In fact, according to U.S. Census Bureau new residential construction statistics for February 2009, new housing starts have dropped by 47.3% from those in February 2008. It’s safe to say that as a whole, new home construction is pretty much bankrupt until things really begin to turn around financially.
• Luxury At Home – The luxuries of home improvement are also effectively bankrupt in 2009. At home luxuries like installing new in-ground pools or adding hot tubs are just not a reality in today’s economy. Convenience services are also taking a severe hit; for example, having professional landscaping services attend to the lawn bi-weekly is just not something those facing financial struggle can justify right now.
While the financial and economic situation we’re facing can really take a toll on maintaining a positive outlook, it’s important to remember than things will turn around-hopefully sooner than later. And another notable bright side of the picture is the fact that thanks to reduced demand, there really has never been a better time than now to complete home improvements for those that are able to afford them!