This year may be a year of change for the industry or the economy as a whole. Here are 10 indicators that you can watch for to gain insight into future market conditions that may affect your remodeling business.
- Stock Market Benchmarks. The stock market has suffered as of late. Look at long term trends for high percentage declines that may predict the likelihood of a recession.
- Consumer Confidence. High consumer confidence numbers translate to increased spending on things like home remodeling. A 20-25% drop in consumer confidence numbers would be concerning.
- Interest Rates. In a healthy economy, interest rates trend up. Longterm declining interest rates suggest that there is uncertainty for investors about the outlook of the economy.
- Government Policy. Tariffs, the federal budget deadline and the national debt ceiling may affect the 2019 economy. Trade disputes may impact cost of materials and their availability and government funding could affect permitting.
- House Prices. Stable house prices with a small upwards trend is a good sign. If the prices increase to quickly, affordability becomes an issue. If they decline, it can be a symbol that people are uncomfortable with the state of the economy.
- Inventory. Homes for sale can either be overbid or undersold. A strong demand for available housing is a good sign.
- Hiring. Look at area employers and the rate in which they are hiring. This will indicate their confidence in the market.
- Project Types. Label your upcoming jobs “want-to” vs. “have-to.” If clients are completing a high number of “want-to” projects, they are confident in their spending.
- Leads. Tracking your rates of conversion is a good indicator of what is going on in the economy.
- Young Households. Are younger customers comfortable in investing in their homes? Or are they nervous about market conditions?
Keeping tabs on these indicators nationally, locally, and within your own business will help you determine the direction of the economy as a whole. Even if the remodeling business is strong, it will feel the effects of a down-turn in the economy.
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