The housing market recovery is still a long ways away especially for Apex Homes, and proof is in April’s numbers. Housing sales - http://www.blogger.com/img/blank.gifmeasured by signed contracts - dropped in April to a staggering low. The National Association of Realtors says its index of sales agreements for previously occupied homes sank 11.6% last month to a reading of 81.9.
A reading of 100 would be considered healthy. The last time the index reached at least 100 was in April 2010. That was the final month when people could qualify for a home-buying tax credit of up to $8,000 that was greatly used by Cary Homes buyers.
Signings are still nearly 8% above June's reading of 75.9, the lowest figure since the housing bust.
Contract signings are considered a reliable indicator of the housing market's direction especially for Chapel Hill Homes. That's because there's usually a one to two month lag between a sales contract and a completed deal.
But the Realtors group has noted a larger than usual number of contract cancellations in recent months. Some buyers have canceled purchases after appraisals showed that the homes were worth less than the buyers' initial bids. A sale isn't final until a mortgage is closed on Clayton Homes.
The trade group said Friday's report implies a slower than expected market recoverhttp://www.blogger.com/img/blank.gify in upcoming months, in light of rising oil prices, severe weather across the Midwest and South and a rise in applications for unemployment benefits.
The index of contract signings was uneven across the country: It rose 1.7% in the Northeast but dropped 8.9% in the West, 10.4% in the Midwest and 17.2% in the South with a large drop on Durham Homes.
High unemployment, tighter credit and a lingering fear that home prices have yet to hit bottom are preventing many Americans from buying homes.
That's true despite super low mortgage rates and home prices that are falling in some areas, like on Fuquay Varina Homes, to their lowest points in a decade.
Overhanging the entire housing sector are waves of foreclosures. They are forcing down home prices and holding back a potential recovery.
Economists say it could be several years before the nation's housing market recovers especially on Garner Homes. Sales of previously occupied homes fell last year to their lowest level in 13 years.
Home purchases numbers are just below half of the number that was in 1963. This is a hard number to comprehend since in the United States there are 120 million more people. This difficult home market will continue to affect sales on Holly Springs Homes.
02 June 2011
BEST BEACH IN THE US: FLORIDA'S SIESTA BEACH
After years as being a runner up in the best-beach rankings, Sarasota's Siesta Beach is finally number one.
The wide slice of brilliant white sand and warm, emerald water on Florida's southwest Gulf coast was named the best beach in the United States Friday in an annual survey by Florida International University.
Siesta Beach, 40 acres of almost pure quartz crystal sand on the Siesta Key barrier island, was runner-up in rankings the past two years and was third in 2008.
The sand is often compared to sugar because it is so soft and super fine. This beach claims to have the finest, whitest sand in the world.
San Diego's Coronado Beach was runner-up. Rounding out the top 10 were:
• No. 3, Kahanamoku Beach in Waikiki, Honolulu, Hawaii
• No. 4, Main Beach, East Hampton, N.Y.
• No. 5, Cape Hatteras in North Carolina
• No. 6, St. George Island State Park, Florida Panhandle
• No. 7, Beachwalker Park, Kiawah Island, S.C.
• No. 8, Coast Guard Beach, Cape Cod, Mass.
• No. 9, Waimanalo Bay Beach Park, Oahu, Hawaii
• No. 10, Cape Florida State Park near Miami
The beaches are ranked on 50 criteria, including the look and feel of the sand, water quality, weather, facilities and crowds. A top score is 250. Siesta Beach came in the 230s, losing minor points because the vista is heavy on condos to the north and south of the county park. Once a beach reaches the pinnacle of the list, it is retired from consideration for future rankings.
A number 1 spot on the popular list annual typically brings a 15 to 20 percent boost in visitors for the beach destinations.
Siesta Beach got big points for shallow water and gentle currents. Most days you measure waves over there in inches, not feet.
Repeat visitors are not surprised by the beach’s ranking. Many enjoy the powdered sugar sand, calm waters, cleanliness and nearby bathrooms. One visitor commented that the beach is pretty pristine and praised that it is kept in pretty good shape. Another commented that is has got the best sand of any beach and it can be crowded and not seem like it's crowded just because it is so wide and long.
Parking at the public beach is free, but regulars say that by late morning it can be challenging to find a spot in the 800-space lot.
The report touted Gulf Coast destinations Siesta Beach and St. George Island State Park despite last year's BP oil spill, which soiled parts of the western Florida Panhandle coastline. Siesta Beach and other strands on the state's west coast remained untouched by crude, but BP crews are still scouring places that were affected for scattered tar balls, even though the vast majority of damage has by now been cleaned up. St. George Island, in the eastern part of the Panhandle southwest of Tallahassee, didn't get any oil, but it was off last year's list because it was in the line of fire before the gusher was capped.
Even then, when the oil spill occurred, researches said oil was not going to get to the Sarasota beaches and southwest Florida. A big loop current trapped the oil 100 miles offshore, and the oil just spun and spun in the Gulf. And, in fact, right now one can hardly find any of it, even in the areas which did have oil and tar on the beaches in the Panhandle.
Separate from the top 10 list, which is in its 21st year, Florida International University leadership has a project called the National Healthy Beaches Campaign. Campaign member beaches pay $800 a year to be evaluated monthly on 60 self-reported criteria and receive advice on maintaining environmental quality through proactive management. It is emphasized that beaches do not pay to be evaluated for the top 10 best beaches list, and that all top 10 candidates are visited incognito to collect sand and water samples for study.
Eliminating each year's national winner from consideration in future surveys hasn't diluted the quality of the annual rankings. Researchers insist that the United States has hundreds of beautiful beaches in which to choose from for their rankings.
The wide slice of brilliant white sand and warm, emerald water on Florida's southwest Gulf coast was named the best beach in the United States Friday in an annual survey by Florida International University.
Siesta Beach, 40 acres of almost pure quartz crystal sand on the Siesta Key barrier island, was runner-up in rankings the past two years and was third in 2008.
The sand is often compared to sugar because it is so soft and super fine. This beach claims to have the finest, whitest sand in the world.
San Diego's Coronado Beach was runner-up. Rounding out the top 10 were:
• No. 3, Kahanamoku Beach in Waikiki, Honolulu, Hawaii
• No. 4, Main Beach, East Hampton, N.Y.
• No. 5, Cape Hatteras in North Carolina
• No. 6, St. George Island State Park, Florida Panhandle
• No. 7, Beachwalker Park, Kiawah Island, S.C.
• No. 8, Coast Guard Beach, Cape Cod, Mass.
• No. 9, Waimanalo Bay Beach Park, Oahu, Hawaii
• No. 10, Cape Florida State Park near Miami
The beaches are ranked on 50 criteria, including the look and feel of the sand, water quality, weather, facilities and crowds. A top score is 250. Siesta Beach came in the 230s, losing minor points because the vista is heavy on condos to the north and south of the county park. Once a beach reaches the pinnacle of the list, it is retired from consideration for future rankings.
A number 1 spot on the popular list annual typically brings a 15 to 20 percent boost in visitors for the beach destinations.
Siesta Beach got big points for shallow water and gentle currents. Most days you measure waves over there in inches, not feet.
Repeat visitors are not surprised by the beach’s ranking. Many enjoy the powdered sugar sand, calm waters, cleanliness and nearby bathrooms. One visitor commented that the beach is pretty pristine and praised that it is kept in pretty good shape. Another commented that is has got the best sand of any beach and it can be crowded and not seem like it's crowded just because it is so wide and long.
Parking at the public beach is free, but regulars say that by late morning it can be challenging to find a spot in the 800-space lot.
The report touted Gulf Coast destinations Siesta Beach and St. George Island State Park despite last year's BP oil spill, which soiled parts of the western Florida Panhandle coastline. Siesta Beach and other strands on the state's west coast remained untouched by crude, but BP crews are still scouring places that were affected for scattered tar balls, even though the vast majority of damage has by now been cleaned up. St. George Island, in the eastern part of the Panhandle southwest of Tallahassee, didn't get any oil, but it was off last year's list because it was in the line of fire before the gusher was capped.
Even then, when the oil spill occurred, researches said oil was not going to get to the Sarasota beaches and southwest Florida. A big loop current trapped the oil 100 miles offshore, and the oil just spun and spun in the Gulf. And, in fact, right now one can hardly find any of it, even in the areas which did have oil and tar on the beaches in the Panhandle.
Separate from the top 10 list, which is in its 21st year, Florida International University leadership has a project called the National Healthy Beaches Campaign. Campaign member beaches pay $800 a year to be evaluated monthly on 60 self-reported criteria and receive advice on maintaining environmental quality through proactive management. It is emphasized that beaches do not pay to be evaluated for the top 10 best beaches list, and that all top 10 candidates are visited incognito to collect sand and water samples for study.
Eliminating each year's national winner from consideration in future surveys hasn't diluted the quality of the annual rankings. Researchers insist that the United States has hundreds of beautiful beaches in which to choose from for their rankings.
01 June 2011
LUXURY APARTMENTS AVAILABLE TO ALL
Renting was never as good as it is now with luxury Philadelphia apartments. Due to a glut of glitzy condo towers and the need to appease skittish lenders some developers have found a new use for the gilded, clubby preserves once meant for buyers who could afford the seven-figure price tags. They're renting them out and offering all of the perks normally reserved for the elite. The hand-watered grass roofs and outdoor movie theaters. The heated, valet-attended porte-cocheres. The pet spas offering canine cardio and play dates for your puppy.
And developers have found that renters -reluctant to buy in a still-unsteady market- are embracing them. One marketing banner flapping against a ritzy, new rental building in New York says it best: "Repent. Rent. Repeat."
Frank Gehry's crumpled, stainless-steel skyscraper in Manhattan--the tallest residential tower in the world--was originally supposed to include 200 sprawling condos along with 700 rentals. Now all of the critically-acclaimed building's apartments are for rent. The units, whose rents start at $2,630 for a 600-square-foot studio, are even rent-stabilized --meaning rents are regulated so tenants will only see small annual increases. There's even an option to pay extra for décor hand-picked by Gehry, including Capellini's Rive Droite armchair, Jonathan Adler's Claude Drawers and Blu Dot's Swept Sofa.
People like the fact that they don't have to commit to a mortgage and a large dollar amount to live here.
The upgrades aren't limited to New York buildings. Luxury Chicago apartments that are 547-square foot studio in the Jeanne Gang-designed Aqua, with its liquid, undulating glass skin and curving balconies, can be had for $1,571. In late April at Silicon Valley's Three Sixty Residences, the sales office re-opened as a rental office. Since 2007, not one of the building's sleek condos, with their Bosch appliances and Del Tango cabinetry, had made it out of escrow and into a final sale, despite the fact that the plush residence sits in the middle of Silicon Valley, one of the U.S.'s top 10 millionaire hotspots. This is good news for those wanting to rent a luxury St. Paul apartments.
During the credit bubble, the 651 units in New York's MiMA might have easily gone into bidding wars, as similar properties had. Instead the developer put 500 of the apartments on the market as rentals. Since rentals in the Hell's Kitchen building became available in mid-March, 70 percent of the rentals have been leased. For $3,390 a month you will get quartz countertops, Italian cabinetry and 44,000-square-feet of hand crafted party space. There's also a subsidized 24-hour Equinox gym.
One man looked at an apartment at MiMA because of the buzz the development had generated. He took one look at the brushed-oak floors and floor-to-ceiling windows and filled out an application. In May, he moved into a 1,200-square-foot two bedroom. He pays $6,400 a month for an apartment he says he could never afford to buy - and wouldn't want to if he could. He feels so many people are in debt with real estate that he doesn’t want to put a lot of his money into a purchase.
That's a departure from the attitude of the housing boom years. Renting used to be thought of as lower class among young, executive-class strivers, a sure sign that you couldn't come up with the money for a down payment. Now, even among the rich, leasing luxury West Chester apartments and being untethered is chic.
Would-be homeowners in some parts of the U.S. should look elsewhere for long-term investment returns. It's sobering to think, but some people shouldn't be thinking of their home as an asset.
Conflicting signals about the market have only added to the allure of renting for those who might otherwise buy. Prices and interest rates are low. But lending standards are strict. Supply is abundant. But so are the forecasts that the U.S. could be in for a lost decade of sideways house prices. It's led to a resurgence in people taking advantage of the renter's subsidy, the idea that while real estate prices are stuck or moving lower, it's better and cheaper to rent premium real estate than it is to buy.
There is a lot of people who can afford to buy, but who won't buy. The statistics on renting luxury Pittsburgh Apartments and owning reflect that sentiment. One-third of U.S. homeowners now owe more on their homes than they are worth. Since the financial crash, nearly 3 million households have gone from owning to renting. Another 3 million are expected to do the same by 2015. That has led to higher rents; the average price of a two bedroom residence is nearly $1,000, a 50 percent increase since 2001. Still, in nearly three quarters of cities, it is cheaper to rent than to own.
These factors have helped push home ownership rates to a 10-year low; 66.4 percent of Americans own their homes, down from a record 69.2 percent in 2004.
And developers have found that renters -reluctant to buy in a still-unsteady market- are embracing them. One marketing banner flapping against a ritzy, new rental building in New York says it best: "Repent. Rent. Repeat."
Frank Gehry's crumpled, stainless-steel skyscraper in Manhattan--the tallest residential tower in the world--was originally supposed to include 200 sprawling condos along with 700 rentals. Now all of the critically-acclaimed building's apartments are for rent. The units, whose rents start at $2,630 for a 600-square-foot studio, are even rent-stabilized --meaning rents are regulated so tenants will only see small annual increases. There's even an option to pay extra for décor hand-picked by Gehry, including Capellini's Rive Droite armchair, Jonathan Adler's Claude Drawers and Blu Dot's Swept Sofa.
People like the fact that they don't have to commit to a mortgage and a large dollar amount to live here.
The upgrades aren't limited to New York buildings. Luxury Chicago apartments that are 547-square foot studio in the Jeanne Gang-designed Aqua, with its liquid, undulating glass skin and curving balconies, can be had for $1,571. In late April at Silicon Valley's Three Sixty Residences, the sales office re-opened as a rental office. Since 2007, not one of the building's sleek condos, with their Bosch appliances and Del Tango cabinetry, had made it out of escrow and into a final sale, despite the fact that the plush residence sits in the middle of Silicon Valley, one of the U.S.'s top 10 millionaire hotspots. This is good news for those wanting to rent a luxury St. Paul apartments.
During the credit bubble, the 651 units in New York's MiMA might have easily gone into bidding wars, as similar properties had. Instead the developer put 500 of the apartments on the market as rentals. Since rentals in the Hell's Kitchen building became available in mid-March, 70 percent of the rentals have been leased. For $3,390 a month you will get quartz countertops, Italian cabinetry and 44,000-square-feet of hand crafted party space. There's also a subsidized 24-hour Equinox gym.
One man looked at an apartment at MiMA because of the buzz the development had generated. He took one look at the brushed-oak floors and floor-to-ceiling windows and filled out an application. In May, he moved into a 1,200-square-foot two bedroom. He pays $6,400 a month for an apartment he says he could never afford to buy - and wouldn't want to if he could. He feels so many people are in debt with real estate that he doesn’t want to put a lot of his money into a purchase.
That's a departure from the attitude of the housing boom years. Renting used to be thought of as lower class among young, executive-class strivers, a sure sign that you couldn't come up with the money for a down payment. Now, even among the rich, leasing luxury West Chester apartments and being untethered is chic.
Would-be homeowners in some parts of the U.S. should look elsewhere for long-term investment returns. It's sobering to think, but some people shouldn't be thinking of their home as an asset.
Conflicting signals about the market have only added to the allure of renting for those who might otherwise buy. Prices and interest rates are low. But lending standards are strict. Supply is abundant. But so are the forecasts that the U.S. could be in for a lost decade of sideways house prices. It's led to a resurgence in people taking advantage of the renter's subsidy, the idea that while real estate prices are stuck or moving lower, it's better and cheaper to rent premium real estate than it is to buy.
There is a lot of people who can afford to buy, but who won't buy. The statistics on renting luxury Pittsburgh Apartments and owning reflect that sentiment. One-third of U.S. homeowners now owe more on their homes than they are worth. Since the financial crash, nearly 3 million households have gone from owning to renting. Another 3 million are expected to do the same by 2015. That has led to higher rents; the average price of a two bedroom residence is nearly $1,000, a 50 percent increase since 2001. Still, in nearly three quarters of cities, it is cheaper to rent than to own.
These factors have helped push home ownership rates to a 10-year low; 66.4 percent of Americans own their homes, down from a record 69.2 percent in 2004.
31 March 2011
LOWER PROPERTY TAXES ARE FINALLY CATCHING UP TO MUNICIPALITIES
The lag time between property tax values and the true reality prices causes shortfalls in local governments. Cities, counties and school districts had been sheltered from the full impact of the slump because of the lag between when realty prices fluctuate and values are reset by local tax assessors. That’s changing as property rolls are adjusted to the current market and residents push to have their taxes cut.
Local officials are now facing the consequences. Property- tax revenue dropped in the last three months of 2010 at the fastest pace since home prices slipped from their peak more than four years ago. The decline may continue as values fall further, adding strains to cash- strapped localities that already fired workers, halted projects and cut spending because of the recession that began in 2007.
The decline for local governments contrasts with a recovery for U.S. states led by income and sales taxes. Collections in the fourth quarter climbed by $13 billion to $177.8 billion. This is the biggest jump since 2006.
In Maricopa County, Arizona, it was reported last month that values of all property dropped by 12 percent for the next tax year, the second straight double-digit decline. In Los Angeles, the second most-populous U.S. city, property taxes for the year ending June 30 are projected to fall 1.7 percent to $1.42 billion.
The strain may mean credit-rating cuts this year for local- government debt, which trades in the $2.93 trillion municipal bond market.
Local and state property-tax revenue slid $5.3 billion, or 2.9 percent, in the fourth quarter from a year earlier to $177.1 billion. All but $3.7 billion went to municipalities.
The slump in the most-active period for real estate revenue outpaced a
2.5 percent drop in the first quarter of 2010, the only other significant decline since prices peaked in 2006.
Residential real estate prices in 20 U.S. cities dropped by the most in more than a year in January. Property values fell 3.1 percent from January 2010, the biggest year-on-year decrease since December 2009. That’s prompting homeowners to seek reductions in the assessed value of their properties.
A symptom of a depressed real estate market has been a proliferation of successful tax appeals. This causes problems because a municipality has already assessed a property, collected taxes and made payments to local school boards and county governments.
Montclair, New Jersey, officials had to remake their budget when tax appeals reduced revenue to $51 million from an expected $53 million in the current budget year. They were forced to make large changes in library services, abolish community pre-kindergarten and lay off 12 municipal workers.
Only 15 percent of counties raised property taxes to make up for the lost revenue. Such a strategy can draw voters’ ire, as Carlos Alvarez, the former mayor of Miami-Dade County, Florida, found out. He was thrown out in a recall election on March 15 after he boosted property-tax rates last year to make up for a drop in home values.
Many local governments have been anticipating the revenue slide and cutting budgets to compensate. They’ve eliminated 377,000 jobs, or 2.7 percent of payrolls, since employment peaked in September 2008. The usual cost cutting has already happened and now deeper cuts are being made to compensate for the loss of revenue.
Local officials are now facing the consequences. Property- tax revenue dropped in the last three months of 2010 at the fastest pace since home prices slipped from their peak more than four years ago. The decline may continue as values fall further, adding strains to cash- strapped localities that already fired workers, halted projects and cut spending because of the recession that began in 2007.
The decline for local governments contrasts with a recovery for U.S. states led by income and sales taxes. Collections in the fourth quarter climbed by $13 billion to $177.8 billion. This is the biggest jump since 2006.
In Maricopa County, Arizona, it was reported last month that values of all property dropped by 12 percent for the next tax year, the second straight double-digit decline. In Los Angeles, the second most-populous U.S. city, property taxes for the year ending June 30 are projected to fall 1.7 percent to $1.42 billion.
The strain may mean credit-rating cuts this year for local- government debt, which trades in the $2.93 trillion municipal bond market.
Local and state property-tax revenue slid $5.3 billion, or 2.9 percent, in the fourth quarter from a year earlier to $177.1 billion. All but $3.7 billion went to municipalities.
The slump in the most-active period for real estate revenue outpaced a
2.5 percent drop in the first quarter of 2010, the only other significant decline since prices peaked in 2006.
Residential real estate prices in 20 U.S. cities dropped by the most in more than a year in January. Property values fell 3.1 percent from January 2010, the biggest year-on-year decrease since December 2009. That’s prompting homeowners to seek reductions in the assessed value of their properties.
A symptom of a depressed real estate market has been a proliferation of successful tax appeals. This causes problems because a municipality has already assessed a property, collected taxes and made payments to local school boards and county governments.
Montclair, New Jersey, officials had to remake their budget when tax appeals reduced revenue to $51 million from an expected $53 million in the current budget year. They were forced to make large changes in library services, abolish community pre-kindergarten and lay off 12 municipal workers.
Only 15 percent of counties raised property taxes to make up for the lost revenue. Such a strategy can draw voters’ ire, as Carlos Alvarez, the former mayor of Miami-Dade County, Florida, found out. He was thrown out in a recall election on March 15 after he boosted property-tax rates last year to make up for a drop in home values.
Many local governments have been anticipating the revenue slide and cutting budgets to compensate. They’ve eliminated 377,000 jobs, or 2.7 percent of payrolls, since employment peaked in September 2008. The usual cost cutting has already happened and now deeper cuts are being made to compensate for the loss of revenue.
15 March 2011
Upswing Expected To the Home Remodeling Market
During the recession many home owners saved their dollars, however, this year is forcasted to show an upswing in home improvement. Spending on remodeling probably will rise 9.2 percent to $125.1 billion in the first quarter from $114.6 billion a year earlier. A 13 percent increase forecast for April through June would be the largest jump in five years. which is good news for those in home remodeling Parma, Ohio and home remodeling Chagrin Falls, both areas that were hit hard by the recession. Home-improvement retailers are preparing for a spring sales bump as homeowners consider upgrading rather than selling their houses at a discount in a struggling market. These are signs of recovery in the economy are encouraging people to spend money on work they may have been putting off for years.
Spending on renovations may increase 3.5 percent annually through 2015. The data measured includes hours worked by remodelers and retail sales at building materials stores. The gain follows a decline that started in the third quarter of 2007 and sent spending to a six- year low of $112 billion in 2009.
New owners of discounted, foreclosed properties and a tax credit for energy-efficient windows and modifications will help drive remodeling demand. The bulk of spending during the next five years will be on replacements and upgrades rather than high-end projects.
The Residential Remodeling Index by Asheville, North Carolina-based BuildFax showed demand for remodeling rose 18 percent in December from a year earlier, the property data provider said Feb. 15. The index tracks the number of construction permits issued for home improvements in specific metropolitan regions.
Home Depot and Lowe’s, the largest U.S. home-improvement retailers, said they plan to hire additional seasonal workers during the next few months. Both companies in February reported fourth-quarter profits that exceeded analyst estimates, and Home Depot raised its earnings forecast for the year.
Improving employment and consumer confidence are drawing customers back stores.
The U.S. unemployment rate fell to 8.9 percent in February, the lowest in almost two years, the Bureau of Labor Statistics reported last week. Retail spending probably will increase 4 percent in 2011, according to the National Retail Federation.
Many people are holding onto their homes until the value can improve. While they are holding onto these properties they are putting some well deserved money into renovating.
Some property owners are stuck in their homes after falling values left almost a quarter of mortgage holders owing more than their residences are worth. U.S. home prices fell 2.4 percent in December from a year earlier and are down 31 percent from the July 2006 peak, based on the S&P/Case-Shiller index of values in 20 cities. A Chapel Hill Real Estate Agent was hopeful that the increase in home remodeling would eventually lead to improvement in the home sales market.
The negative equity may limit remodeling projects as it dries up a source of funding. Americans spent about $63 billion a year from home-equity loans on renovations during the 2000 to 2005 real estate boom.
Home Depot, the largest U.S. home-improvement retailer, said on Feb. 22 that earnings per share excluding some items will increase as much as 9.5 percent this year, up from a December forecast of no more than 9 percent. The company is hiring more than 60,000 temporary workers to handle an expected spring sales surge.
The average Home Depot purchase jumped 2.6 percent in the fourth quarter, the most in more than four years, though consumers are favoring smaller improvements and are still cautious about spending on major renovations.
Lowe’s plans to hire 50,000 seasonal workers this spring which is up from 43,000 a year ago.
The driving force behind this year’s spending increases will be baby boomers, the first of whom are reaching 65 and preparing their homes for retirement. Raleigh Homes and Cary homes in North Caroline are expected to see a small increase in home sales as the baby boomers look to relocate to desirable locations.
Spending on renovations may increase 3.5 percent annually through 2015. The data measured includes hours worked by remodelers and retail sales at building materials stores. The gain follows a decline that started in the third quarter of 2007 and sent spending to a six- year low of $112 billion in 2009.
New owners of discounted, foreclosed properties and a tax credit for energy-efficient windows and modifications will help drive remodeling demand. The bulk of spending during the next five years will be on replacements and upgrades rather than high-end projects.
The Residential Remodeling Index by Asheville, North Carolina-based BuildFax showed demand for remodeling rose 18 percent in December from a year earlier, the property data provider said Feb. 15. The index tracks the number of construction permits issued for home improvements in specific metropolitan regions.
Home Depot and Lowe’s, the largest U.S. home-improvement retailers, said they plan to hire additional seasonal workers during the next few months. Both companies in February reported fourth-quarter profits that exceeded analyst estimates, and Home Depot raised its earnings forecast for the year.
Improving employment and consumer confidence are drawing customers back stores.
The U.S. unemployment rate fell to 8.9 percent in February, the lowest in almost two years, the Bureau of Labor Statistics reported last week. Retail spending probably will increase 4 percent in 2011, according to the National Retail Federation.
Many people are holding onto their homes until the value can improve. While they are holding onto these properties they are putting some well deserved money into renovating.
Some property owners are stuck in their homes after falling values left almost a quarter of mortgage holders owing more than their residences are worth. U.S. home prices fell 2.4 percent in December from a year earlier and are down 31 percent from the July 2006 peak, based on the S&P/Case-Shiller index of values in 20 cities. A Chapel Hill Real Estate Agent was hopeful that the increase in home remodeling would eventually lead to improvement in the home sales market.
The negative equity may limit remodeling projects as it dries up a source of funding. Americans spent about $63 billion a year from home-equity loans on renovations during the 2000 to 2005 real estate boom.
Home Depot, the largest U.S. home-improvement retailer, said on Feb. 22 that earnings per share excluding some items will increase as much as 9.5 percent this year, up from a December forecast of no more than 9 percent. The company is hiring more than 60,000 temporary workers to handle an expected spring sales surge.
The average Home Depot purchase jumped 2.6 percent in the fourth quarter, the most in more than four years, though consumers are favoring smaller improvements and are still cautious about spending on major renovations.
Lowe’s plans to hire 50,000 seasonal workers this spring which is up from 43,000 a year ago.
The driving force behind this year’s spending increases will be baby boomers, the first of whom are reaching 65 and preparing their homes for retirement. Raleigh Homes and Cary homes in North Caroline are expected to see a small increase in home sales as the baby boomers look to relocate to desirable locations.
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