LDP Bloggers

With median prices on 1 BR apartments jumping 6% since last year in New York City, it is no surprise to find that homeowners are holding off on unnecessary improvements. Nevertheless, institutions have picked up the slack, taking advantage of a glut in construction to get needed upgrades built or installed at discount as contractors look to fill their slower schedules with lower prices.

For instance, office remodels and school renovations top the list of renovations made this year, according to a report published by Gibralti & Elis. NYC kitchen remodeling and bathroom renovation, however, slowed to a percentage of projects so low it hasn’t be experienced since the slump of the late 70’s. All of this goes to show that although prices have risen in the core NYC market, consumers aren’t confident about the future of those prices and that, as a result, they aren’t as willing to invest in homes whose prices will either keep appreciating without improvements or which will fall regardless of the improvements.

What this is overall is that consumers do not feel that they can outwit the market with value-added renovation. And this is a bad sign from the standpoint of consumer confidence about the economy. Obviously a consumer who feels completely determined by the economic environment is one who will be reluctant to take big risks so long as the status quo is maintained. In other words, the reduction of homeowner spending in NY on apartment remodeling is a symptom of a bigger problem of consumer insecurity – an insecurity whose implied prophecy, a weak housing market, may be self-fulfilling. (Many thanks to Gibralti & Elis for their insight.)

This entry was posted on Tuesday, June 3rd, 2008 at 10:17 pm and is filed under new york kitchen design. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.