Recent reports from Home Depot, the world’s largest home improvement retailer, show customers have never spent more than they have in the past 3 months (CNN Money). Besides surging Home Depot’s stock prices higher, this also provides more fuel to the increasingly strong real estate market.
Why is this such a good sign? Home Depot is just one store after all, how much can it reflect the strength of the real estate industry and economy as a whole?
Take it one step further. Homeowners and general contractors are equally important variables. Homeowners have been purchasing more and more home improvement goods. Whether it be to increase value and sell, or just to add to their new house purchase, neither would be occurring if the market wasn’t steadily increasing in strength. Further, the contractors are purchasing more and more materials to build. This proves a strong correlation with the spike in new construction across the country. Buildings have been shooting up at alarming rates, including those that were put on hold during the recession.
With all these signs pointing to a seller’s market in most areas, one would think that there will be a shift and soon to be changed to a buyer’s market. However, taking into consideration the different markets across the country, there are no signs of changes to come.
Homes in the hottest markets, are still flying off the shelf with only 26% of homes being available 1 month later in San Francisco (CNN Money). These extremely hot markets are slowing though, mainly due to the affordability factor. In slower markets, such as those in Detroit and Kansas City, we notice an increase in the speed at which homes sell. Once again, this is likely due to affordability factors making it much easier in these markets.
Using a bird’s eye point of view, we can visualize the stabilization of the real estate industry across the nation. Markets that are last to recover from the recession are ramping up and the hottest markets in the country are slowing. With great interest rates still available, we still see buyers fighting over the inventory and that doesn’t seem to be changing anytime soon. So, make sure to do your due diligence and start making some offers, as you’ll want to be in this rising market sooner than later!