Brooklyn Construction Firm Says Home Remodeling Projects, Not Home Sales, Are On the Rise

Arc III Construction Corp., a Brooklyn-based construction firm offering high-end renovation services in the New York area, says that many homeowners are remodeling their spaces rather than buying new homes and experts expect this trend to continue.

Alex Chiesi, president and founder of Arc III Construction Corp., a full service design, remodeling, and construction firm that specializes in the renovation and new construction of both residential and commercial projects throughout the tri-state region, home improvement spending is expected to rise five percent in the United States in 2010, but the surge is not expected to result in the increase in sales of new homes.

“The money spent on remodeling will increase this year due to the gradual recovery in the broader economy, according to a report released by the Joint Center for Housing Studies at Harvard University,” says Chiesi. “Last week, the center published its ‘Leading Indicator of Remodeling Activity,’ which tracks data points such as building materials shipments and housing starts as a way to gauge construction trends.”

According to Chiesi, a spike in remodeling is good news for homebuilders if it means that homeowners are sprucing up their homes in order to sell and then buy again. Currently, homebuilders are suffering from a four-year slump that dragged the sales of new homes to a record low in February. Unfortunately, he says, that may not be the case.

“A recent American Express Co. survey found that only five percent of homeowners are preparing their homes for sale and that 53 percent believe that a seller's market is at least two years away,” says Chiesi. “A little more than half of those surveyed do not think they would get their asking price if they were to sell now.”

Chiesi says that on average, homeowners plan to spend around $6,000 in 2010 on remodeling, according to the American Express survey. Almost half said that they plan to remodel as a way to improve their home's appearance.

“Foreclosure purchases could account for much of the planned remodeling activity because they tend to sit empty and sustain a fair amount of damage,” says Chiesi. “Selling those homes after fixing them up would reduce supply and that would eventually help new home builders.”

For now, he explains, activity among move-up buyers is low and new home sales are extremely depressed.

“While home remodeling may not translate into new home sales in the short term,” Chiesi says, "any activity that gets contractors employed and gets materials flowing, is a positive thing."

Arc III Construction is a multi-disciplined New York construction management and engineering firm specializing in project planning, risk management, program management, project due diligence, construction management, critical path method scheduling, schedule delay analysis, construction cost estimating, construction claims, quantification of damages, defect evaluation & analysis, and construction training. Incorporated in 1995 as a residential contractor, ARC III Construction has grown to become one of New York City's finest general and finish contractors offering custom furniture, millwork, and high-end renovation services. For more information call 917-547-1728 or visit www. arc3construction.com.

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