The Sweet Spot Remodeling Blog
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As editor in chief of Professional Remodeler, a lot of information crosses my desk. This blog will be a chance to share some of that with you, with an immediacy not possible with a monthly magazine. It's also your chance to tell me what you think about what I have to say. Whether you agree or disagree, I hope you won't be shy. Post here, write me at jonathan.sweet@reedbusiness.com or you can also follow me on Twitter at www.twitter.com/sweetedit.
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Tuesday, June 23, 2009
Is the Dream of Homeownership Dead?
Jun 23 2009 2:25PM | Permalink | Email this | Comments (0) |
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By Jonathan Sweet
The housing crash has people rethinking the attractiveness of home ownership, according to a new study out today from the National Foundation for Credit Counseling.
The idea that many in the industry have been selling for years is that homeownership is the best way to build long-term wealth. Well, almost half of Americans aren't buying it anymore, according to the survey, with 49 percent of respondents agreeing with that owning a home "is no longer a realistic strategy for building wealth."
This confirms what I've been hearing anecdotally from remodelers and real estate agents, and frankly just talking to friends and other acquaintances. People are feeling burned by home ownership. Other studies have shown similar trends.
So what does that mean for remodelers? In my opinion, less of the big flashy projects and more of the smaller "need" projects going forward. I honestly believe, as I've written many times before, that we at the beginning of a wholesale change in the housing market. The trailing baby boomers and Generation X don't have the money of the leading baby boomers and probably never will. Combine that with a negative opinion about the investment potential of housing, and I think we need to accept that the crazy days of earlier this decade were a fluke and future growth in the industry is going to come on the shoulders of smaller projects.
I'm not the only one thinking this -- the Harvard Joint Center for Housing Studies has made similar projections. Kermit Baker, director of the Remodeling Futures program, talked about that when I interviewed him earlier this year.
We’re going to be rebuilding it through $10,000, $15,000, $20,000 remodeling projects and more of them, and not through the $50,000, $75,000, $100,000 projects that really drove the market over the last few years.
A few other interesting results from the survey:
- 42 percent of those who have owned a home in the past think they'll never own another one
- 31 percent of those who currently own a home think they'll never be able to afford to own another one
- 32 percent of those who have never owned a home don't think they'll ever be able to afford a home
The full results of the study are available on the NFCC Web site.
