Rest of ‘07 Still Looks Good for Remodeling
CAMBRIDGE, Mass. – Each spring and fall, economist Kermit Baker of the Harvard Joint Center for Housing Studies, presides over a meeting of remodeling industry leaders to discuss the latest market data. This week’s bi-annual event was marked by a preview of a new remodeling market leading indicator index and a look at remodeling growth in the coming months.
After growing at a torrid pace during most of 2005 and 2006 — with rates at or approaching 20 percent during some quarterly periods — the remodeling market is experiencing slower growth in the 5 percent range and will likely stay that way for the remainder of the year.
Regionally, there are places in the country where remodeling is actually declining (think of hard hit Michigan and Ohio where auto industry retrenchment has hit the hardest, or of specifc market bubbles where home prices appear to be headed down), but everywhere else remodeling demand has firm underlying support.
The underlying support, Baker told the group, comes from three main factors:
- The economy remains in growth mode; recession is not imminent
- There are high levels of home equity — “cash out” refinancing activity remains strong, particularly for adjustable-rate mortgage (ARM) conversions
- Several remodeling niches offer growth opportunities — energy retrofits, rental units, and aging-in-place.
But there are some negatives in the remodeling outlook. According to Baker, those negatives are:
- An ongoing residential recession with soft house prices creating nervousness for homeowners
- Existing home sales (while still high by historic levels) have been trending down
- Business conditions softening at remodeling contracting firms
- Consumer debt levels remain high and subprime mortgage fallout will tighten lending standards
The much anticpated new indicator will be called the Leading Indicator of Remodeling Activity (LIRA), which was previewed at the conference, will be released for the first time on April 19.
Revisit this Blog on the 19th for a complete view of the new indicator.
Speaking of Michigan, this is a memo for any of your readers who live there. Join Americans for Prosperity,The Michigaan Taxpayers Alliance, The Wayne County Taxpayers Association, The Kalamazoo Taxpayers Association and others on April 18 in Lansing for the Michigan Taxpayer Tea Party
Please join us for the Michigan Taxpayer Tea Party on the steps of our state Capitol on Wednesday, April 18, at 11:00 a.m. We need you to come and join the voices of the hard-working men and women of our state in saying ‘enough is enough!’
At every step we’ve heard from small-business people, including contractors, realtors, restaurant owners, and others, who say Governor Granholm’s tax plan would do their businesses in. Our state government spending continues to increase every single year, while our own incomes are going down and jobs are bleeding out of our state on a daily basis.
April 18 is taxpayers’ day to come to the Michigan Capitol and let Governor Granholm and our state lawmakers know we will not stand for job-killing tax increases. Our goal is to fill the Capitol lawn with men and women like us — men and women who are working hard to support our families while Michigan weathers this economic storm.
Bring a tea bag to give to Governor Granholm. Bring your children to watch democracy in action. Bring as many friends as you can to ensure taxpayers’ voices will be heard in Lansing on April 18!
Thank you!
“An ongoing residential recession with soft house prices creating nervousness for homeowners”
Many homeowners are counteracting this nervousness by using a Home Equity Line of Credit (HELOC) as in interest cancellation account to accelerate their home equity and thereby payoff their home “free and clear” *many* years sooner than listed on the mortgage amortization schedule.
Today’s Real Estate market means that folks can no longer count on appreciation to build home equity. Those who realize that they need to pay down their current mortgage debt are looking for alternate ways to aggressively (yet safely) build equity.
And they’ve discovered a perfect online system to do that; they can focus on their wealth accumulation goals while accelerating their equity simply by using a Home Equity Line of Credit to ‘power’ the Money Merge Account™ financial solutions program.
A typical 30 year loan (of whatever type) can be paid down in 1/3 to 1/2 the time — it’s a great way to save *huge* amounts of income by eliminating a mortgage amortization front-end interest load. (On a million-plus dollar home, I’ve personally seen where the Money Merge Account™ program will save the homeowner $750,000 in interest charges!)
And the best thing – homeowners don’t have to refinance their existing mortgage or, in most cases, make any adjustments to their lifestyle.
It is unfortunate that most of us were never taught to follow three essential principles: (1) Avoid paying interest, whenever possible, (2) Use other people’s money, whenever possible and (3) Find and use a financial system that will guide you, especially if you have the tendency to go off-track. The Money Merge Account™ software and the program’s counselors use these principles to keep each homeowner focused on their wealth accumulation goals.
I’d be happy to provide further details…