Remodeling the Housing Market
First published in The Financialist in 2014.
The economy may not be growing as quickly as we’d thought, but there are still reasons for optimism: Pending sales of U.S. existing homes rose the most in nearly three years in March, appeasing investors who had been concerned with falling existing home sales in the first two months of this year. Credit Suisse anticipated the strong gain, noting that the prior decline was mostly due to falling sales of distressed existing homes. What’s more, that decline was arguably a positive development, the bank pointed out, because fewer foreclosures and short sales can drive up home prices and in turn stoke more large-scale remodeling. To that end, a Credit Suisse survey showed that 86 percent of respondents planned home improvement projects in the next 12 months, up from 70 percent a year ago, with a full 37 percent planning large-scale remodeling and renovation rather than maintenance and repair. Americans are increasingly optimistic about home prices, too: 56 percent expect home values in their area to increase over the coming year, compared with a low of 21 percent in 2011, according to a recent Gallup poll.
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JENS ERIK GOULD
Jens Erik Gould is a political, business and entertainment writer and editor who has reported from a dozen countries for media outlets including The New York Times, National Public Radio and Bloomberg News.