Not in 2008 according to Harvard’s Joint Center for Housing Studies:

Falling consumer confidence and a weakening economy are
inhibiting remodeling spending according to Harvard’s Joint Center for
Housing Studies. The Leading Indicator for Remodeling Activity (LIRA)
reports that homeowner spending for home improvement activity will
continue to decline, falling by an annual rate of 4.8% through the end
of 2008.

Click on the chart for a look (thanks for the help Roadguy!)

How about you? Do you have home improvement projects on hold? For us, we’re going to touch up some paint and replace a drafty front door. Then we have to do some landscaping or we risk our children being swallowed by mud pits on rainy days. But we’re not planning to spend more than maybe $4,000 max on housing maintenance and improvement this year (cross our fingers).

It’s not as fun to put money into a house that may decline in value, even if it’s just in the near term.

Adjustable rate mortgages have been dragged through the mud in recent months. Much of it’s justified. But there are reasons to get an ARM and Bankrate.com goes through just what they are in their new real estate guide:

They say to consider an ARM, if:

1) You’re good with your money
2) You don’t plan to stay in a house long
3) You expect significant salary increases and bonuses
As for life stage, they say ARMS are:

GOOD for young people: “If you’re buying a first home or starter home that you expect to upgrade as you have children and earn promotions”

BAD for parents with young kids: “If you’ve upsized to your dream home — or at least a house you see yourself in for a decade or more — you’ll generally benefit by sticking with the security of a fixed rate”

GOOD for parents with teens: “An ARM can be a good choice for families who need every extra penny for college and retirement savings, and who will have extra cash once junior’s tuition bill has been paid off. It’s also beneficial for people who plan to own a home for only a few years before downsizing to a smaller place once the kids are out of the house. Be sure, however, that you’re willing to sell before the introductory term is up or be willing to sacrifice savings that may be better used for your golden years”

BAD for retirees:”ARMs are rarely good choices for those living on a fixed income, as most retirees do”

Maybe an ARM would have been good for us, because it would have given us a kick in the pants a year or two ago to sell the fixer-upper starter home. Then again, maybe we would have just had to refinance last year.

I think we’re going to see the starter-home/trading-up after three or four years phenomenon supressed for some time. We purchased a two story, three bedroom home in a modest St. Paul neighborhood for $149,000 in 2002. Then we fixed it up, and hired people to fix it up and now owe $159,000 on the property because we’ve redone the thing from top to bottom and used took some money out of a refinance in 2004 to finish part of the basement. It was recently assessed by the city at $183,000. Trading up with a wad of home equity to help us buy a much nicer home in a much nicer neighborhood just doesn’t seem sensible today, and I can’t see that changing any time soon.

Many others are wearing similar shoes, or worse because they purchased in ‘05 or ‘06 with the idea that they could sell and trade up in a couple of years. I think homeowners could see their tenure in the house last much longer than the 5 to 7 years that seemed so far off when they signed up.

I certainly didn’t. I had just graduated from college and was thrilled with the fact I was finally getting health insurance and making more than $10 an hour.

My friend Sarah sent me this link to a NY Magazine story about what $100,000 would have bought a decade ago. Studio on the upper east side anyone?

I wonder what type of Mpls real estate you could have found for $100,000? I was far from the point in my life where I was thinking of settling down and buying a house. Too bad my magic 8-ball failed to inform me that ten years later I would be married to my college boyfriend and living two miles from where I went to school!

Happy Monday. Has anyone else noticed that tax forms– those 1099s and W-2’s– are landing in mailboxes later this year?

I’ve received not a single tax form this year. Last year, I completed my taxes on MLK weekend.

If you had to make a wager on a recession would you say yes, it’s likely or no, we’re fine? I must admit all this doom and gloom talk has gone to my wallet.

The housing market: If you had some money lying around, would you use it to buy an investment property? Anyone trying to buy or sell? What’s it like out there?

I’m clearing out my e-mail inbox (I know it’s not a personal finance topic, but if someone has the answer for efficient e-mail management I’m all eyes).

Two of the messages announce blogs written by smart experts on hot button topics.

The first is Anna Lusardi, a Dartmouth professor and financial literacy expert. Her new blog (http://annalusardi.blogspot.com/). It doesn’t look like she’s posting daily. But it will be a good place to monitor for new research on why the heck so many Americans know so little about money.

Lusardi is Italian and one topic I’d like to see her address would be financial literacy in Italy and other parts of the world and whether it’s a global issue or a more localized one.

Closer to home, Mark Ireland a former assistant attorney general who is now a staff attorney with the Foreclosure Relief Law Project in St. Paul, launched Consumer Rights Watch (http://consumerrightswatch.blogspot.com) His blog will cover many issues relating to foreclosure and sub prime lending, two complex topics that are getting a lot of attention.