Despite a growing sense of economic recovery on the horizon, the housing industry remains weak. According to NAHB, new home sales (as of May 2009) are down roughly 33 percent from a year ago. While existing home sales have remained somewhat constant over the last year, they are nonetheless down about the same amount over the last four years. New home sales are down nearly 75 percent in that same time span. Nationally, new single-family building permits are down 43 percent from May 2008.

Photo Credit: Blogging Jupino

The housing market has somewhat leveled off in 2009, even posting a few months of modest increases. Yet any prediction of a significant rise seems hardly in the cards at this point.  Although positive change may come up in those cards eventually. Certainly it will be some time before we can see if new tax credits for home buyers and energy efficient upgrades, among other things, have some influence on the numbers. But as of yet, the industry still moves ahead cautiously.

The remodeling industry, however, tends to garner a more uplifting forecast, although a full recovery to the highs of the past decade have essentially been thrown off the table. Still, The Remodeling Market in Transition, a new report by the Joint Center for Housing Studies (JCHS) of Harvard University, foresees opportunity in the remodeling market; following a significant “correction” in the industry.

The Harvard study points to several reasons why they expect a bright future for remodeling. Among them:

• Energy efficiency will be reason number one why homeowners choose to remodel and upgrade their home’s infrastructure. In addition to tax incentives, more homeowners are noting the long term savings involved in energy efficient upgrades.
• Foreclosed homes may become an unexpected ally to remodelers. As the housing market slowly recovers, these foreclosed homes will provide opportunities for remodeling as banks and new owners renovate and repair.
• Renting is on the rise as homeownership declines. The number of renters is up 3 million and, considering the large number of under-maintained rental properties, that could open up a sizable and long overlooked sector of the remodeling industry.

Photo Credit: Bloomberg.com

So even though remodeling and housing are inextricably linked in a fundamental way, it would appear that as the market recovers, remodelers will get the first opportunities to get back to work. But if there is a lesson in these and other predictions, it is that contractors who understand energy efficient upgrades will have a noted advantage over the competition.

Green design, green materials, green building practices. These are the likely future of remodeling and the housing industry by and large. Indeed, it looks like a green future for remodelers.

This entry was posted on Tuesday, July 21st, 2009 at 9:49 am and is filed under Industry News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.