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Ready to fix up your house?

Posted by Scott Van Voorhis January 29, 2013 07:12 AM

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If you are fixing up your house, you are not alone. Home renovation projects are on the rise, with a key index that tracks home renovation activity hitting levels not seen since the housing bubble.

The Remodeling Market Index has surged back to boom-time levels, hitting 55 during the last three months of 2012, reports the National Association of Home Builders, which puts out the quarterly index.

In fact, that's just a shade below the last high point in the renovation market, way back in the first quarter of 2004, according to the home builders' group. Anything over 50 indicates a rising market. Check out this graph.

Yes, that was back in the good old days, when the Home Depot around the corner from my Natick fixer-upper was open late into the night. I have fond memories of looking at paint chips at midnight - and I was hardly the only one in the store. Not quite sure we are back to that kind of craziness, but the numbers are clearly looking better.

Given that everything from bathroom upgrades to new additions practically ground to a halt after the Great Recession hit, we have certainly come a long way back.

The low point came in the fall of 2008, when, with the world economy on the brink of collapse, NAHB's remodeling index plunged below 20.

It has been on the rebound since then, crossing the crucial threshold from a contracting market to a rising one in the third quarter, when the index nudged past 50.

Some of this increase is likely tied to the rise in home sales, with buyers deciding to plunk money down for improvements before they move into their new homes, the home builders group suggests.

That makes a certain amount of sense - there was a spike in remodeling activity in the first quarter of 2010, when the federal $8,000 home buyer tax credit trigged a short-lived sales boom.

Still, why not renovate instead of trying to sell and move to a bigger or more pleasing house?

Given the dearth of homes on the market and the lack of choices in the Boston area, it may make more sense for some buyers hoping to move up in this market to instead fix up what they already own.

It certainly makes more sense than fantasizing about a dream house that anywhere else in the country might put you a few hundred thousand dollars, but here in Greater Boston could easily cost a million or more.


This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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