Enough, already, with all the gloom and doom.
I don’t know about you, but I’ve been sick to my stomach for months because of deteriorating business conditions. That’s all I hear about anymore. And, to tell you the truth, I’m not just sick about it, I’m tired of it, too. Tired of hearing about it day in and day out. Tired of thinking that’s all there is to our industry anymore.
Yes, the housing market is in the throes of a significant downturn. Yes, falling home prices are dampening discretionary spending and reducing the equity homeowners have available to finance remodeling projects. Yes, unemployment is up, financial markets are frozen, and the number of homes in foreclosure is soaring. And, yes, consumers have lost confidence, and are not spending like they once did.
We’ve heard for months about all of this, about the enormous cloud enveloping the housing sector. It’s not an exaggeration. We know it’s real. Painful, too. We feel it in our personal lives and witness it on the balance sheets of our businesses. We see it on the faces of friends and neighbors, relatives and business associates. We hear it from prospects and customers.
But enough already!
While reports about the current downturn are certainly real, their pervasiveness – their sheer volume – is distorting reality, halting people in their tracks, masking some significant positives that are being buried under an avalanche of dismal news.
Some of those positives, thankfully, were brought to light last month with the release of a report from the Joint Center for Housing Studies of Harvard University, as well as a survey conducted by Better Homes & Gardens (see stories, Economy Continues to Batter Housing Sector and Economy Reshaping Buying Patterns, Survey Says).
The dual reports point out, for example, that, despite the downturn, remodeling still rests on a very solid foundation, and kitchen/bath projects still retain their almost unique importance to consumers.
Yes, foreclosures are up, but homeownership rates are still historically high and nationwide housing affordability has surged to its highest level in five years. Yes, home equity has declined from its 2005 peak of $12.5 trillion, but homeowners still possess $8.5 trillion of equity. Yes, unemployment has risen, but 92% of Americans still hold jobs. Yes, resales are down, but 4.5 million existing homes are still expected to change hands in 2009. Yes, consumer confidence is down, but there are still 130 million U.S. homes in need of maintenance, repairs and upgrades to address changing preferences and lifestyles.
That’s good news.
It should be recognized. It should be reported.
The Joint Center & BH&G reports also conclude that, even in the midst of today’s uncertain economic climate, new opportunities are emerging – opportunities that should be even more pronounced on the other side of the recession.
When housing markets recover, consumer demand for sustainable design and energy-efficient products will pave the way for a new wave of green remodeling. Years of underinvestment will result in improvements to the nation’s rental stock. Foreclosed properties will create opportunities, as banks and new owners renovate those properties. And the growing population of immigrant homeowners will bolster home-buying and remodeling activity for years to come.
Consider this a pep talk, if you will – or at least a reminder, timed to conicide with next month’s K/BIS in Atlanta
Maybe it’s time we get our collective heads out of the funk we’re in, and put things in perspective. The fact is, this industry still rests on the same solid foundation that fueled growth over the past two decades. The prospects for the future are anything but bleak. Ample opportunities exist, if you assertively and skillfully search them out.
It’s not all gloom and doom out there, even if it often feels that way. It’s time we stopped thinking that it is – time we start believing again.