Nov 1 2007 7:47AM | Permalink | Email this | Comments (0) |
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Last night, I took my 3-year-old daughter trick-or-treating (Belle from Beauty & the Beast. Thanks for asking.). It really hit me as we were walking around how many homes out there are on the market. A lot of them are empty, either people who had to move while the house was on the market or people who have suffered through a foreclosure. (Usually the condition of the grass and landscaping answers that question.)

That's not surprising in light of a recent Census Bureau report that shows more than 2 million vacant homes for sale right now. That's a scary number. As the CNN article I linked to above points out, that's the equivalent to the entire Detroit metro area sitting vacant (insert your joke here). With rates resetting for many homeowners in the next two years, some analysts are predicting a rise to 3 or 4 million before the worst is over.

What this means is declining consumer confidence, which spells bad news for remodelers. It was irrationally high consumer confidence in 2002 and 2003 that kept remodeling going, so the recent drops reported by the various indices would seem to point us to a downturn in the market. That's being reflected in the forecasts for the next few years being issued by NAHB and Harvard.

At the same time, I keep hearing positive news from a lot of remodelers. On our various forms we send out for items like Market Leaders, Innovators, etc., companies are projecting sizable increases next year, as is everyone I talk to in person.

So is this more "irrational exuberance," to borrow a term from Alan Greenspan, or is there something I'm missing here?