Home Improvement Industry Feels Pain of Housing Slump
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The housing slump has a far reaching arm when it comes to the damage to related industries. People are realizing there are a lot of things they can do without when the dollar is tight and they've opted to forgo such luxuries as new home furnishing and high end kitchen remodels. Places like furniture and furnishing businesses, where the sharp drop in sales is blamed on an abrupt cut in furniture shopping, something that most home owners do not see as a necessity, and home improvement giants such as Lowes, Home Depot and Sears have all felt the effects of a slow housing market.
The housing slump has a far reaching arm when it comes to the damage to related industries. People are realizing there are a lot of things they can do without when the dollar is tight and they've opted to forgo such luxuries as new home furnishing and high end kitchen remodels. Places like furniture and furnishing businesses, where the sharp drop in sales is blamed on an abrupt cut in furniture shopping, something that most home owners do not see as a necessity, and home improvement giants such as Lowes, Home Depot and Sears have all felt the effects of a slow housing market.
Home improvement retailers are expected to post weaker results and probably won't see a rebound at least until 2009 as the U.S. housing slump, concerns about recession and tighter credit conditions stall consumer spending.Source: Reuters, ocregister
While falling home sales and construction have been a major hit to results over the past year, these retailers have also been hurt as consumers aware of falling home prices pulled back from big-ticket projects such as kitchen remodeling.
"A large part of renovation is to set it up to improve the value of the property," Doug Kass, head of the bearish hedge fund Seabreeze Partners Management, told the Reuters Housing Summit in New York this week.
"And now, given the erosion in (home) values, it seems it's not all that necessary," he added.
Kass said many people don't realize that buyers who refinanced their homes and took cash out to fund improvements or trade up to higher-end goods no longer have that luxury.
Labels: home sales, market, real estate
This has also been hitting home for me. I still am caught in bewilderment whenever I ask myself, 'didn't they see this coming?'
I guess when your on top it really is difficult to discern things.
-Joe Salcedo
http://renohomeblog.com
Posted by
Reno Real Estate |
5:25 PM
Far reaching is right. With finacial ramifications are already extending into the billion and the bottom still a year out, its anyones guess as to where the final tally stops. There's also another side to the coin. There are thos that feel the industry was was inflated and that what some are calling a recession, could more aptly called a correction.
Posted by
RJ C. |
7:22 PM