The National Association of the Remodeling Industry (NARI) announced the winners of its highly regarded Contractor of the Year awards in 37 project categories. I noticed that none of the awards were issued to contractors of homes on the east coast metropolitan region. This is quite different from when I was president of the local NARI chapter in suburban Philadelphia almost two decades ago when prominent contractors in New York. Philadelphia and Washington DC were recognized among the country’s leaders is spectacular remodeling. I wondered how unlikely it was that not a single one of the 37 awards was issued in the region that more than 1/4 of the nation calls “home”.
Why the absence of local talent in these awards? There could be plenty of reasons but I’m most concerned about one possibility: the lagging performance of home value appreciation in the eastern metropolitan region might be an underlying and largely unseen drag on the entire industry.
Other trends contribute to my concern. Remodeling contractors report that the average job in the first quarter of 2016 is smaller now than it was a year ago. It appears that homeowners continue to have difficulty financing large remodeling jobs so they postpone or reduce planned projects.
This is a case where I’d love to be wrong. But I suspect that we remain in a period where – in the absence of new governmental stimulus programs – residential real estate will continue to show lower than average long term financial performance.