Americans may not be able to sell their homes, but many will start to refurbish them. Part may be due to the belief by consumers that the recession is over. But, it may be just as important that homes need repair whether they are for sale or not. A long period of neglect only hurt home values.
The Wall Street Journal cites an IHS Global Insight report:
Forecasting firm IHS Global Insight is predicting a 3.3% increase to $152.4 billion in 2011, not adjusted for inflation, and an additional 5.7% in 2012. That comes amid other signs of momentum in residential renovation, such as a report this week showing confidence among builders of single-family homes is at its highest level since mid-2007.
What the analysis does not tell is what happens when this improvement cycle ends, particularly if home sales do not pick up. Does spending for improvement dry up again as people worry that home values will drop for another several years?