Tuesday, July 29, 2008

Housing Crisis Hits Remodeling

Many home owners who perform home improvements now will be in good shape for the next home price spurt, but they may first get only use-benefits without the added value.

by Broderick Perkins
© 2008 DeadlineNews.Com

Unauthorized use of this story is a copyright violation -- a federal crime

Deadline Newsroom - It's a good time to negotiate a bargain on a home improvement -- even if it won't do a lot for your home's value.

Many homeowners are reluctant to put money into a home improvement for fear their home value will decline anyway.

Home improvements, once used to help boost the value of homes, are the latest victim of the housing crisis.

Harvard's Joint Center for Housing Studies says home improvements are set to decline by an annual rate of more than 11 percent into the first quarter of 2009.

Kermit Baker, director of the Remodeling Futures Program of the Joint Center blamed weak home sales and the growing inventory of unsold homes for discouraging upper-end remodeling in many areas.

Weak home sales and swelling inventories are the byproducts of a housing market plagued by foreclosures and tight underwriting standards.

The fallout prevents new home purchases and refinanced mortgages that often result in cash pulled out for home improvements.

The same areas with the worst foreclosure conditions, California, the Southwest and Florida, are also finding fewer homeowners engaging in home improvements.

Still, long term forecasts expect industry growth, Harvard projects a 44 percent inflation-adjusted increase in the remodeling business nationwide from now through 2015.

Homeowners who make home improvements now will be better positioned for the next spurt in home prices.

© 2008 DeadlineNews.Com

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Broderick Perkins, an award-winning consumer journalist of 30 years, is publisher and executive editor of San Jose, CA-based DeadlineNews Group -- DeadlineNews.Com, a real estate news and consulting service and Web site and the new Deadline Newsroom, DeadlineNews.Com's news back shop. In both cases, it's where all the news really hits home.

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