It’s not hard to imagine families thinking: Maybe the old kitchen will do just fine. Maybe we don’t need to blow out the walls and install and island.
But for now, people are still spending an above-average amount on home improvements. In fact, as Calculated Risk notes, for the first time ever, the amount spent on home improvement exceeds the amount spent on the construction of new homes.
Currently investment in single family structures is at 1.05% of GDP, significantly below the average of the last 50 years of 2.35% – and also below the previous record low in 1982 of 1.20%.
Home improvement is at 1.20% of GDP, off the high of 1.30% in Q4 2005 – but still well above the average of the last 50 years of 1.07%.
An alternate take is that home improvement spending is a substitute for buying a new home. Today The Journal reported that shoe cobblers are seeing a massive spike in new business, as consumer choose to get their old soles fixed, rather than springing for a brand new pair of kicks.
Retail sales of adult footwear declined 3.2% in the 12 months that ended in November, from the year-earlier period, according to NPD Group Inc., a market-research firm.
Lawrence Sutton hadn’t set foot in a shoe-repair shop in years. In November, the 36-year-old insurance-company owner walked into Mr. McFarland’s storefront in a strip mall in this town east of Tampa to drop off his wife’s black Prada pumps, which had a broken strap and worn heels. “It’s better to pay $40 to fix them than $500 for a new pair,” he explained. His job is secure, he said, but he’s concerned about the economy and is watching his wallet.
We hadn’t thought of it this way before, but anecdotally we’ve been bringing more apparel to the tailor recently. Anyone else?