Sponsored Content
« Derby Thread | Main | Overnight Open Thread - Commie Day Edition »
May 01, 2010

Old And Busted: House Flipping
The New Hotness: Hunkering Down For The Long Haul

This does not bode well for a fast recovery of the construction or real estate business.

...the forces driving today's action couldn't be more different from those during the boom. Back then, people wanted to renovate their places so that they could trade up to bigger homes, or because their home equity was soaring and they wanted to reinvest some of the spoils.

Now, the opposite is happening: Many people who bought during the boom years are accepting the reality that they won't soon be swapping up for a sybaritic spread. Their mortgages may remain above water, but after years of falling home prices, their equity is so low that the transaction costs of buying a new house would leave little for a down payment...

In short, they are stuck.

...So these people are making their homes more comfortable for a longer-than-expected stay. Setting aside old calculations of how much a particular improvement will add to resale value, they are making smaller tweaks that can make a big difference in livability. You might call it "psychological return on investment."...
This trend is bad news for the big home builders like Toll Brothers/Hovnanian/Lenar, and relatively good news for smaller local GC's willing to take on modest remodel projects.

I'll certainly vouch for the notion of "psychological ROI". Doing all the electrical upgrades on my own crib recently has dramatically increased its usability and utility. There's very little that annoys me about the place anymore in that regard.

I'm doing some similar electrical usability work for a neighbor who has decided they're going to be in their house for a while. Not to the extent that I did with my joint of course, since I value my time at $0.00 when I work on something I want, because I want it.

Still, there were a number of modest material cost, "high impact" things we've done like adding recessed lights over the kitchen sink, a light for the pantry and shower (which were like caves), and adding an additional counter top circuit since they were tripping a 20A breaker constantly and adding some extra lights in the attic.

Its been shocking the number of egregious code violations I've fixed along the way. The electrical inspectors in Palm Beach must have passed houses based on the thickness of the envelopes they were slipped by the builders.

So, how long can this "modest remodel" trend continue? At some point people will have gotten everything done they wanted done. A couple of years? Five at most? At some point budgets will be expended and/or everything done. Undoubtedly a lot of this modest remodel work will be done on a cash basis or by the homeowner if they're capable. I don't see this as a long term economic engine for the economy, rather an indicator that people who are still employed or retired are realizing the lost decade(s) are upon us.

digg this
posted by Purp at 07:53 PM

| Access Comments

Recent Comments
[/i][/b]andycanuck (Vwz3I)[/s][/u]: "U.S. Army says two military helicopters [Blackhawk ..."

rhennigantx: "WTFO?? ..."

Martini Farmer: "Yonder Horde. ..."

George CantStandYa [/i]: " Just remember, it's not a lie if you believe it. ..."

Village Idiot's Apprentice: "Thank you, J.J.! ..."

Hans O'Lo: "An emphatic Moronin, Hourde to all! HB and than ..."

fd: "Joe is appropriating Greek culture? Ye gods! ..."

Ian S.: "[I]So if the bill to read all text goes thru is no ..."

Biden's Dog sniffs a whole lotta malarkey,: "This professor is Delorious! https://tinyurl.co ..."

JT: "hiya ..."

Tonypete: "Good morning everyone. Thank you J.J. ..."

Biden's Dog sniffs a whole lotta malarkey,: "BOING! ..."

Recent Entries

Polls! Polls! Polls!
Frequently Asked Questions
The (Almost) Complete Paul Anka Integrity Kick
Top Top Tens
Greatest Hitjobs

The Ace of Spades HQ Sex-for-Money Skankathon
A D&D Guide to the Democratic Candidates
Margaret Cho: Just Not Funny
More Margaret Cho Abuse
Margaret Cho: Still Not Funny
Iraqi Prisoner Claims He Was Raped... By Woman
Wonkette Announces "Morning Zoo" Format
John Kerry's "Plan" Causes Surrender of Moqtada al-Sadr's Militia
World Muslim Leaders Apologize for Nick Berg's Beheading
Michael Moore Goes on Lunchtime Manhattan Death-Spree
Milestone: Oliver Willis Posts 400th "Fake News Article" Referencing Britney Spears
Liberal Economists Rue a "New Decade of Greed"
Artificial Insouciance: Maureen Dowd's Word Processor Revolts Against Her Numbing Imbecility
Intelligence Officials Eye Blogs for Tips
They Done Found Us Out, Cletus: Intrepid Internet Detective Figures Out Our Master Plan
Shock: Josh Marshall Almost Mentions Sarin Discovery in Iraq
Leather-Clad Biker Freaks Terrorize Australian Town
When Clinton Was President, Torture Was Cool
What Wonkette Means When She Explains What Tina Brown Means
Wonkette's Stand-Up Act
Wankette HQ Gay-Rumors Du Jour
Here's What's Bugging Me: Goose and Slider
My Own Micah Wright Style Confession of Dishonesty
Outraged "Conservatives" React to the FMA
An On-Line Impression of Dennis Miller Having Sex with a Kodiak Bear
The Story the Rightwing Media Refuses to Report!
Our Lunch with David "Glengarry Glen Ross" Mamet
The House of Love: Paul Krugman
A Michael Moore Mystery (TM)
The Dowd-O-Matic!
Liberal Consistency and Other Myths
Kepler's Laws of Liberal Media Bias
John Kerry-- The Splunge! Candidate
"Divisive" Politics & "Attacks on Patriotism" (very long)
The Donkey ("The Raven" parody)
Powered by
Movable Type 2.64