As this chart shows, remodeling activity has surged this year (source). I should know, since we have done quite a bit of it ourselves this year and last. Plus, some contractor friends—particularly one that specializes in energy retrofitting—tell me that business is doing very well.
As Calculated Risk notes: "The BuildFax Residential Remodeling Index increased for the twenty-fourth straight month in October to 147.6, a new high for the index. This was up from 141.4 in September, and up 39% year-over-year from 105.8 in October 2010. This is based on the number of properties pulling residential construction permits in a given month."
Not everything is in the dumps, as you might expect if you only looked at the stock market, PE ratios, and 10-yr Treasury yields.
Scott,
ReplyDeleteI've seen some reports that hedge funds might go on a buying spree to push up year end returns. But then others say they may push the market down if their investors demand redemptions due to poor performance this year. What do you think the odds are that we have a rally before year end?
Scott, great blog you have!
ReplyDeleteI agree with you that stocks are cheap and bonds are expensive. As I have found in life it is all about timing. I think we will have a chance to buy cheap stocks even cheaper when we get out next big scary woosh down, which I beleive is coming sometime in the next 6 months. Thanks again for your great blog.
I am happy for the positive news...but really, is this an accurate take? More remodeling now than in the real estate boom days of 2004-7?
ReplyDeleteI hope this is right.
We're on the front lines and our business activity echos your chart.
ReplyDeleteIt's happening, especially the last two months. We are entering what is normally our slow time of year with huge demand for our services and products.
from my experience there are two contributing factors:
ReplyDelete1) HELOCs are most available type of bank financing right now, banks are still pretty tight with mortgages, but seem interested in writing HELOC business;
2) many homeowners are doing work - from basic sprucing to value-adding projects - now in preparation for a not-too-far-off recovery into which they intend to sell their homes.
Many folks I talk to would have moved in the last four years had the market been open and fluid, but people were stuck in their homes. People feel things loosening and are preparing now.