Home Remodeling Surges in Fourth Quarter - 2/16/2010 10:52:00 AM - Professional Remodeler

Home Remodeling Surges in Fourth Quarter - 2/16/2010 10:52:00 AM - Professional Remodeler:
"Home Remodeling Surges in Fourth Quarter
2010 to mark significant rebound in remodeling industry as foreclosure markets lead remodeling resurgence

News Release
February 16, 2010
HousingZone

GOLDEN, Colo. February 16, 2010 – In a recently released report, ServiceMagic.com found that during the fourth quarter of 2009, homeowners actually increased their number of home remodeling service requests by more than 37 percent over the same period in 2008. Furthermore, the report showed tremendous spikes in home improvement activity in the states with the highest foreclosure rates."

Read on . . .

Now that's good news!

Home Star: 5 answers about 'Cash for Caulkers' - 1/1/2010 - Professional Remodeler

Home Star: 5 answers about 'Cash for Caulkers' - 1/1/2010 - Professional Remodeler: "Home Star: 5 answers about 'Cash for Caulkers'
The low down on the program that's meant to boost energy efficiency and jobs

Jonathan Sweet, Editor in Chief
January 1, 2010
Professional Remodeler

The Home Star program — or 'Cash for Caulkers' as some have dubbed it — could provide a big boost to home energy efficiency through billions in tax credits and other incentives over two years" Read on . . .


The program sounds good on it's face, especially since the construction sector has been hit so hard by unemployment. But, remember that it will be paid for by cap and trade, which has not passed.

Economic Recovery in the Construction Industry

Just got off a call entitled Economic Recovery: Under Construction, part of the 2010 Market Insights Webcast Series.

Some startling statistics about unemployment in the construction sector:

According to Kermit Baker, Chief Economist with the American Institute of Architects, the construction and architectural sectors have been the hardest hit as far as job losses go. Together, these sectors lost 7 million jobs. An even scarier statistic: 23% of construction jobs have been lost and 17% of architecture jobs have been lost.

And Ken Simonson, Chief Economist with AGC of America, put it into perspective. The national unemployment rate stands at about 10.5%. However, the unemployment rate in the construction industry is 22.7%. This is depression level unemployment!

Another scary statistic: Only 4.5% of all jobs are in the construction sector but yet 22% of all job losses have been in construction.

Clearly, the construction industry has been hit hard by this recession. Hopefully, part of the President’s new job initiatives will speak to this devastation in our industry.

Replacement Contractor Executive Conference Is Coming Up

You can sign up now for the Replacement Contractor Executive Conference. As the U.S. economy moves back in the black, pent-up demand will create unique opportunities for companies prepared to dominate their marketplace by going for BIG GROWTH. Be ready.

Report Reflects Surge in October Home Improvement Spending

Maybe you are seeing some up-turn in your own remodeling market. I hope so. It seems that remodeling is on the rise again, thanks in part to the energy tax credit. Check out this great article from Professional Remodeler magazine.


Report Reflects Surge in October Home Improvement Spending - 12/2/2009 1:44:00 PM - Professional Remodeler:

"Government reports are showing that spending on home improvement surged 8.7 percent in October as American homeowners respond to tax credits.

Data from the U.S. Commerce Department’s monthly construction spending index showed spending on home improvements at a seasonally adjusted annual rate of $114 billion in October – a jump of 8.7 percent from $104.9 billion in September."

Home Buyer Credits Extended and Expanded

On November 6, 2009, President Obama signed the Worker, Homeownership, and Business Assistance Act of 2009. Among other things, the Act extends the $8,000 first time home buyer credit for homes purchased or under contract by April 30, 2010. In addition, a new smaller credit of $6,500 will now apply to families that have lived in their homes for at least five years and purchase another home between November 6, 2009 and April 30, 2010. Of course, there are restrictions and limitations on both credits. Check out NAHB’s new website Home Buyer Tax Credits for an excellent summary of both credits.

It is the President’s intention that expanding the Home Buyer Tax Credits will help to continue the sale of homes which will, in turn, reduce the inventory of unsold homes and help home prices continue to increase across the country. The White House points out that residential housing investment grew 23 percent in the third quarter, one of the contributors to positive economic growth.

Remodelers Tighten Up Labor Costs to Stay Afloat

Don't kid yourself, these won't be popular ideas to implement and they won't be easy, but sometimes we have to make tough decisions.

Remodelers Tighten Up Labor Costs to Stay Afloat - 10/1/2009 - Professional Remodeler: "Remodelers Tighten Up Labor Costs to Stay Afloat
Faced with a shortfall of new business, remodelers have been obliged to make cuts in staff, pay and benefits and bring work in house that used to be outsourced."

Read more here.

House Passes Homebuyer Tax Credit Extension

The extension of the $8,000 first time homebuyer tax credit moved another step closer today with the passage of the House bill. Included in that bill is a $6,500 credit for existing homeowners who have lived in their home the past 5 out of 8 years to purchase a new home. Next up is President Obama's signature.

Congress Passes Homebuyer Tax Credit - UPI.com: "Congress Passes Homebuyer Tax Credit
Published: Nov. 5, 2009
By Steve Cook Real Estate Economy Watch
After the Senate gave final approval last night without a dissenting vote, the House of Representatives voted overwhelmingly this afternoon to pass legislation containing an extension and expansion of the homebuyer tax credit, completing Congressional action and sending the tax credit to President Obama for his signature, possibly as early as tomorrow."

Read more here.

Senate extends $8,000 homebuyer tax credit

This is great news for the new construction industry and new home sales.

"Tax break for buying a home: The legislation also would extend the $8,000 homebuyer tax credit to contracts signed by April 30 and closed by June 30. The controversial credit, which many say has boosted home sales in recent months, was set to expire after Nov. 30."

Read more here.

It's a Mixed Bag of Tricks

It’s a mixed bag of tricks as far as the economy goes. I reported earlier that GDP grew by 3.5% this past quarter, causing CNN to declare the economy back in gear.

Qualified Remodeler reports today in its Weekly Remodeling Market Overview that new home sales fell in September most likely due to the upcoming expiration of the $8000 first time homebuyer credit. That ends 5 consecutive months of increases in new home sales.

On the other hand, existing home sales are running at a brisk pace, again most likely because of the homebuyer tax credit. The credit expires on November 30, 2009. Buyers must have closed on the home by that date. It makes sense. Unless it’s a spec home, a new home would not be ready in time to take advantage of the expiring credit. And we all know there are not many spec homes around.

There has been some talk of extending the tax credit for one year. Another idea is to expand the credit to include all home buyers.

Home sales fueled the prior economic expansion and, in many ways, directly contributed to the current recession. Does it make sense that housing needs to recover first before the entire country can recover? That’s an interesting question to ponder.

Economy finally back in gear . . . according to CNN

Great news today! According to CNN, "Government says GDP grew 3.5% in third quarter, ending a year-long string of declines and coming in better than forecasts."

Read the entire article here.

I know that we are seeing more activity in our own local remodeling business. Sales are up in both September and October. More calls coming through. And people are thinking about doing more than just repairs.

For those who have continued to market through the downturn, you are in the right place at the right time. For those who haven't, you've got alot of catching up to do.

Regards,
Annette

UCLA Anderson Forecast Says The Recession Is OVER!

The end of a recession is the best time to start or grow a business. Are you ready? According to the UCLA Anderson Forecast, a leading economic forecaster, the recession is over. Don't miss this boat!

The UCLA Anderson Forecast: "In a report titled, “The Long Goodbye,” UCLA Anderson Forecast Senior Economist David Shulman states, “ … after four quarters of decline, economic growth is resuming. We forecast that real GDP will increase at 2.1% in the current quarter and 2.3% in the fourth quarter. For all of 2010, we forecast quarterly growth to average 2% with noticeable improvement at the end of the year.”"

Check out the full article on the UCLA Anderson Forecast website.

The positive and the negative

According to Hanley Wood’s Key Indicator Alert from last week, the economy is still improving slightly. The stock market has been heading in the right direction; mortgage rates are declining; new and existing home sales are increasing. The main drags on the economy now are jobs and lending.

Employers are still shedding jobs but at a slower pace than previously. That makes sense as businesses are trying to maximize their smaller profits or, in some cases, minimize their losses.

Lending is still a big problem for our industry. Most homeowners don’t have the financial wherewithal to pay for large remodeling projects out of pocket. Therefore, larger projects are put on hold. There is still activity, however, at the maintenance level.

Oh, and a big plus was the surprisingly large increase in the August Consumer Sentiment. Are we ready to move forward? I’m thinking consumers are not happy with the prospect of another bleak holiday season.

Finally, Some Good News for Remodelers

There’s a lot of positive news in Qualified Remodeler’s September 4th Weekly Market Overview. First, according to data from ServiceMagic.com, remodeling (versus repair and maintenance) requests are on the rise, especially among those in homes valued between $200,000 and $300,000. And, equally interesting, is that baby boomers (those in the 45 to 64 age group) are the ones making those requests. Interest is rising in kitchen and bath remodeling. And consumers are intent on increasing the entertainment value of their homes with the purpose of staying home more. (Remember our discussion of cocooning several months ago?)

And the biggie: According to Qualified Remodeler, “Homeowners plan to tackle small projects, keeping with the Q1 trend, with the intent to head into large-scale remodels in early 2010.”

Be cautiously optimistic, fellow remodeling professionals. Plan ahead and be ready. There is still a major issue in remodeling. That is how homeowners plan to finance their improvements. With home values down, the spigot has been turned off on their home equity lines.

Personally, we are already seeing more calls in our own remodeling business. Projects are still smaller but more and more, people are thinking about larger projects.

6 Myths About Green Consumers

I recently ran across this article entitled, 6 Myths of Green Consumers. It states:

"A new national study of green consumers contradicts several long-held stereotypes about them: The environment is not their top concern, their kids are not influencing them to be green, and while many know what they should do to save the planet, they often don’t do it."

It's based on a study of consumers who, at least occasionally, buy green products. It's an interesting article and I thought you might like to read it.

http://www.ecohomemagazine.com/news/2009/08/6-myths-of-green-consumers.aspx

HIRE Act of 2009 Would Help the Remodeling Industry

More help for the remodeling industry could be on the way in the form of a tax credit that would stimulate the purchase of kitchen cabinets and other remodeling and home furnishing improvements.

Congressmen Henry Johnson (D-GA) and Nathan Deal (R-GA) have sponsored the legislation called the Home Improvement Revitalize the Economy (HIRE) Act of 2009. The Act would give individual consumers and joint filers respectively a $2,000 or $4,000 tax credit for purchasing items that meet recognized environmental standards (LEED, NAHB, Green Globes, SFI/FSC and ESP). Retailers, contractors and building product resellers can receive up to $10,000 for covered purchases.

“Not only would this help stimulate the manufacturing market for home furnishings and buildings products, it would save retail jobs, generate billions in revenue and increase home values at the time when we really need a boost,” according to Johnson. “By creating this tax deduction, we will offer incentives for consumers who would otherwise forego spending in 2009 and 2010. We will encourage environmentally sound practices by doubling the benefits for the purchase of building products and home furnishings that meet nationally recognized environmental standards.”

Check out the recent article in Professional Remodeling online or the KCMA website to learn more.

What can you do to support this bill? Contact your representative and ask that he or she co-sponsor the bill.

This Week’s Key Indicator Report

This week’s Key Indicator Alert from Hanley Wood Market Intelligence is not a particularly positive report. Other than mentions of the slightly positive housing news from the last report, there is also mention of the higher unemployment rate (which I’m sure you have all heard about on the news). The positive spin is that we are losing fewer jobs. But the unemployment rate is still the highest it’s been since 1983. When I graduated from college in 1981, I remember looking in the Washington Post for a job in my field and finding one listing! What did I do? Stayed in the job I had during college until the recession was over.

The other news is that national average mortgage interest rates have declined this week. That may get more people into the housing market as fear of missing out on low rates could take hold. When rates were rising over the last couple of weeks, there were fewer refinance applications and fewer home purchases.

Be award that earnings season starts soon and the markets could show some volatility in the upcoming weeks.

Here's what you can do: Stay positive. And take positive action. I know it’s hard with all of the negativity surrounding us day in and day out. Take the time now to build your business skills. And keep moving forward.

Positive economic news continues for remodeling industry

In the latest Key Indicator Alert from Hanley Wood Market Intelligence, the slightly positive economic news continues for the remodeling and home improvement industries.

Both new and existing home prices continue to rise slightly. Existing home sales rose but new home sales fell slightly. Mortgage rates are continuing to creep up, too. Those factors are making possible buyers re-think their wait and see strategies. It may be time to jump into the market.

And inventories of both new and existing homes are continuing to go down. That means we are working through the foreclosed homes (although slowly) and there are less homes available.

So what happens when there is less supply and more demand? Prices go up. Everyone wants what they can’t have. And the housing industry heats up again.


Check out more business advice for your remodeling or construction business.

Continuing the Positive Economic News

The Hanley Wood Market Intelligence Key Indicator Alert is out for the week. It’s more positive news, although slightly so. At least it’s not negative. The stock market did pull back some from its run. But that’s to be expected with investors wanting to take their profits when they can.

You may have heard in the news that housing starts jumped in May by 17%. That’s true but . . . it’s mostly multi-family housing. Single family housing rose only by 3%.

Housing continues to move ever-so-slightly up. New home starts are up and inventories are low – about 10 months. That’s the lowest the new homes inventory has been since over a year ago. And the median new home prices continue to rise ever so slightly. Of course, they are still down drastically from where they were just a year ago.

Existing home sales also rose but are down from where they were one year ago. And more slightly good news is that the median existing home prices are inching upward.

Mortgage rates continue to rise and fall. Last week they fell again.

So the good news is that things are moving in the right direction, although very slowly. That’s probably for the best right now. We don’t need any huge spikes and we certainly don’t need the economy to go into over-drive overnight. Slow and steady.

If you’d like to learn how to discover trends in your own market, check out my article How to Become Your Own Economist – Reliably Predict Your Construction or Remodeling Market.

More positive economic news trickling in

The Hanley Wood Market Intelligence Key Indicator Alert is out for this week. And there is more positive news about the economy.

First both new and existing home sales are up slightly, making the third straight month of increases for both indicators, while median home prices for both new and existing homes have increased, too. These indicators could be pointing toward a stabilization in the housing markets, one of the key requirements for a true economic recovery to take place.

In addition, consumer confidence soared in May to its highest level since last September. Also significant is that this is the third straight month that the consumer confidence index has increased.

Personal incomes have increased slightly for the first time since last September. But consumer spending is down. So what are people doing with their money? Paying down debt and putting it into savings. Could this be an indication that consumers will be ready to buy once they know that the economy is out of recession?

If you have been watching the stock markets, you’ll notice a steady rise. Regular market increases and pull-backs have been the norm lately. And more money is moving back into those equity markets.

This all sounds like great news, doesn’t it? Don’t get excited too quickly, though. We’ve still got a huge albatross. It’s called the auto industry. With both GM and Chrysler in bankruptcy, look for effects on employment and consumer spending in the near future.

And then there is . . . inflation. But we won’t go there yet.

If you’d like to learn more about your own market (a micro-economy) by following three economic indicators each month, check out my article How To Become Your Own Economist: Reliably Predict Your Market With Just 3 Easy-to-Find Economic Indicators.