by Nancy Osborne, COO of ERATE®
May 24, 2008 - Not surprisingly with the real estate market having hit the skids, the National Association of Home Builders projects that the home improvement industry will also suffer as a casualty right along with it, declining 7% this year alone and unlikely to return to the peak it reached in 2006 for another four years. The home improvement industry moves in tandem with the larger housing market and as home sales have taken a tumble and the broader economy has weakened, home improvement projects have naturally been placed on the back-burner. Contractors who were booked solid into the foreseeable future are now wide open and eager for work. Therefore home remodeling contractors who had been notoriously over-scheduled in recent years and exasperatingly unavailable to new clients are now happy to have your business. If you have sufficient equity in your home and are able to set up a home equity line of credit or are perhaps one of the lucky few who have ample cash reserves set aside in the bank to cover the improvements, there might not be a better time in recent years to finally begin your home improvement project.
A combination of factors has conspired in the market, all adding up to a decided drop in business for contractors working in the home remodeling industry. Those elements contributing to the switch are primarily home prices leveling off to declining along with the now stricter lending guidelines which are being applied universally. Home sellers often initiated a remodel project on a property they were hoping to unload or flip and home buyers were in turn looking to remodel or upgrade their newly purchased homes, now falling home prices have impacted both of these remodeling consumers as home equity was frequently used as the source to tap into to complete a project. Of course geographic regions throughout the country vary greatly as to the magnitude of the real estate downturn and some areas are performing surprisingly well but higher end jobs are still few and far between as consumers are becoming increasingly cost conscious as the overall economy has destabilized. But while needed home maintenance projects and repair work are still being initiated, there are far fewer high-end kitchen and bathroom jobs being requested. So for those homeowners who have been waiting in the wings, ready, willing and able to proceed with their home remodeling dream project, the wait is over. Call that previously over-booked unattainable contractor now before the market reverses course again.
Nancy Osborne has had experience in the mortgage business for over 20 years and is a founder of both ERATE, where she is currently the COO and Progressive Capital Funding, where she served as President. She has held real estate licenses in several states and has received both the national Certified Mortgage Consultant and Certified Residential Mortgage Specialist designations. Ms. Osborne is also a primary contributing writer and content developer for ERATE.
"I am addicted to Bloomberg TV" says Nancy.