Remodeling Surge Reflects Rise in Real Estate Prices
That Palm Beach County real estate prices have been on the rise for a while is certainly one factor that has coaxed some of the more cautious buyers off the sidelines. It’s made the market a much more lively (and happy!) place than it was a few years ago—and forecasters are fairly uniform in predicting continuing growth, though at a less overheated pace.
For those who are even more cautious, the question remains whether property values and the Palm Beach County real estate prices that reflect them are likely to hold up over the long haul. They may know that, historically, homeownership has proven to be one of the most reliable investments, but the memory of that financial meltdown from a few years back can be hard to get over…
They may be taking heart from an article I ran across earlier this month which is bound to boost confidence in the future of West Palm Beach’s real estate prices. It was in a weekday edition (February 4) of The Wall Street Journal. Stretching all the way across the top of the U.S. News page was this headline: “Homeowners Acquire a Taste for Remodeling,” over the subhead “Projects Pick Up, to the Tune of $130 Billion in 2013, as Property Values and Equity Rebound; Sign of Market Confidence.”
The article had the expected chart and graph supporting the Journal’s optimistic takeaway depicting “Building Momentum.” Too, there was an illuminating quote from Moody’s Analytics. Moody’s reported an 18% leap in home equity lending—further evidence of the strong rise in home values (banks lend against equity, after all). That, WSJ pointed out, is the root of the steep increase in remodeling activity, because when people have confidence in underlying values, they decide it is worth investing in upkeep and improvements.
It’s cause and effect—sort of like a domino chain, but in reverse. The first domino picks itself up, attracting the second, and suddenly all the dominos are back upright.
The Journal summed it up: “If home prices are going up and people have more equity in their home, things like remodeling and refurbishment will do well, because it’s effectively the way of playing the reinvestment game.”
For Palm Beach County contractors and tradesmen, this is a game they’re happy to see resume. And for cautious prospective homeowners who’ve been watching from the sidelines, it’s a good reason to give me a call. Palm Beach County real estate prices look like they still have a way to go: there are some great bargains out there!
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