Saturday, May 30, 2009

Foreclosure Renovations

Will foreclosures spur home improvements? That is the hope of many who involved with the home improvement industry. The hope is that the sales of foreclosure will spur the demand long enough for the rest of the market to start back up. It does sound like there is a valid point. Many foreclosures have been so badly damaged or just fall into a state of disrepair by being abandoned for so long that some improvements may need to be made just to make the properties habitable. From this article in the Atlanta Journal Constitution titled Spending on home repairs declines details the hope of the home improvement field. Let's take a look -

A report by analysts at Fitch Ratings puts a fine point on what Atlanta-based Home Depot has been saying for several quarters: Home improvement spending is down for the second year in row.

And it’s expected to decline again this year.

In 2008, sales of home improvement products were $290.5 billion, down 4.5 percent from the previous year. The figures are from the Home Improvement Research Institute.


Despite the negative housing trends, the Fitch report said contractors are getting more calls for estimates. Homeowners are looking for affordable, eco-friendly repairs, such as replacing windows and siding.

Homes bought in foreclosure may also present a silver lining.

“Home improvement spending may benefit from banks or new owners renovating these properties,” the report said, though the spending spurt could be temporary.

Apparently Memorial Day weekend brought in some good numbers, finally. Since consumer confidence is also improving people may be spending again. However the devil will be in the details - what are they spending on. Like gardens to save of food expenses??? Or other small improvements to save on utility expenses.

Perhaps we are leaving the penny wise, pound foolish ideology that the housing bubble brought with it. But we really believe Top Ramen does taste better off granite counters. Because it tastes pretty bad eating our laminates!

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