Times are good for the housing market in Houston. A market that was spared the worst of the 2008 recession is now booming like never before. The Houston Association of Realtors reports that home sales have risen for the past 25 months in the Bayou City, and they’ve increased 13.4 percent year over year. The supply of available homes has also leveled off, leading to a strong market for anyone selling their homes.
For many Houston homeowners, the time has never been better to renovate their homes. After all, the Return On Investment is high for these projects. With more demand than supply in the current housing market, homeowners could bring in more money than before if they put homes with new siding or replacement windows on the market.
But be warned: it could soon be more expensive to get these renovations done on your home. Yes, the booming housing market has led to more business for the home remodeling industry in general, but the buying habits of the youngest generation of homeowners could have a particularly strong impact on the price of your remodeling projects. Let’s take a closer look at how “Millennials” are shaking up the housing industry.
Why Young Home Buyers Could See Houston Homes As Assets
All across America, wealthy young professionals from the “Millennial” generation — who are currently in their 20’s and early 30’s — are scooping up homes left and right. But they’re not always calling these new purchases “home.” The Wall Street Journal reports that these ambitious home buyers are often skipping starter homes and stockpiling lavish properties in desirable housing markets in order to rent them out for large amounts of money.
At first glance, this practice doesn’t make much sense. But a closer look at recent economic events shows why many wealthy Millennials view the housing market as the best place to invest. The young professionals of this generation have seen the economy crash early in their professional lives. In particular, Millennials who have roots in the Houston area have seen Enron fall apart, long before Ponzi schemes were making national news.
These public failures have led empowered young professionals to think outside of the box for investment strategies, by investing in homes instead of stocks and bonds. This new pattern could impact existing homeowners looking to improve their homes.
How Renovation Costs Could Soon Rise
The remodeling industry has been busy for quite some time, but it’s likely to get even busier with Millennials flooding the home buying market. Since many wealthy young professionals are now investing in the housing market, it stands to reason that they will be making improvements to these homes in order to sell or rent them at a profitable rate.
These improvements won’t come cheap. The Wall Street Journal reports that a 33-year-old financial professional who recently bought a 2,530 foot condominium at a members-only island community near Miami for $2.2 million is planning on pouring $1 million into renovations, in order to rent out the apartment.
These renovations mean big business for the home remodeling industry. Many contractors nationwide — including those who operate in Houston — are already busy fixing up homes, but they will likely add these lucrative remodeling jobs to their schedules. If companies become overextended remodeling investment homes, their prices could rise. Should that happen, existing homeowners looking to remodel might be shelling out more money to do so. However, it remains uncertain when — or even if — these changes might occur.
Why Millennial Home Investors Could Soon Target Houston
So what could stop this new home buying trend? Not much. Another recession could obviously put the brakes on the stockpiling of properties. Still, Millennials know that there is plenty of housing demand out there — particularly in the greater Houston area. As the Houston economy and population continue to grow, opportunities will remain for Millennials to rent out refurbished homes for high amounts in several communities across Southeast Texas.
Current homeowners looking to remodel their homes shouldn’t worry about the Millennial generation’s recent home buying patterns. After all, these new patterns haven’t adversely affected the cost of home remodeling as of yet. Still, information is currency, and the more knowledgeable current homeowners are about the changes going on around them, the more likely they are to be prepared for whatever changes might come about down the road.
If you’re looking to revitalize your home, Best Investments Siding and Windows is here to help. We believe your home is your Best Investment, and we have many products and services that will help you give it an updated look and functionality. Click here or call us at (281) 852-1866, and we’ll give you a FREE quote.