Home Owners Focus on Home Improvement Over Travel and Entertainment

The recent pandemic has changed home owner’s points of view on many aspects of homeownership. HomeAdvisor’s latest survey “State of Home Spending”, showed the average spent on home-improvements in 2020 rose to $13,138 from 2019’s $9,081.    

Although the survey says higher cost in labor and materials contributes to the higher number, it still shows an increase in American home owner’s spending average on actual home improvements. The National Association of Home Builders (NAHB) reported that 85% of Americans are spending more time at home because of COVID-19. Their spending habits are shifting from travel and entertainment to home improvement projects.

The housing market is hot and the increase in home buying has also fueled home improvement spending. Millennials, (those closest to the median age of first-time homebuyers) have been reported to have increased in home buying.

“Homeownership rates for millennials have jumped significantly, especially as COVID-19 has reemphasized the importance of the home and many companies move to flexible work location options,” said Mischa Fisher, chief economist at HomeAdvisor, in a press release. “Millennials are not only rapidly becoming home owners, but they are also spending more on home improvement than any other generation when they do.”

Those projects that have been important in 2020 have changed from those in 2019. The top 2020 projects were interior painting, bathroom remodels and new flooring installations. The top project which has made the list the last several years did not even make it onto the 2020 list. Prior years those that were surveyed by HomeAdvisor said that room remodels were the most important project.

The home maintenance project that saw the biggest increase year-over-year was cleaning and landscaping. The more everyone was at home with the stay-at-home orders, the messier the home could get. Cleaning and landscaping saw an increase from $1,105 in 2019 to $3,192 in 2020.

According to the survey, “painting was one of the most popular projects across nearly all age groups, because it is relatively affordable and offers a lot of visual value in terms of the look and feel of a room.”

American’s perspective on their home has changed dramatically in the wake of COVID-19. In fact, seven in ten respondents said that the pandemic had increased their need for home cooking, 50% were working from home and 40% were incorporating more home entertaining. The “State of Home Spending” survey summed up that home owners are using their home more and more and it has definitely become an even greater factor in their quality of life.

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St. Tammany Parish's Future Looks Bright Even Among the Pandemic

St. Tammany Parish Development District hired Chris Masingill in May 2018 to be the CEO of St. Tammany Corp. St. Tammany Corp. was developed to create partnerships and opportunities to help the parish prosper. The company is the lead economic development organization in St. Tammany Parish.    

When Masingill began his position as CEO, St. Tammany was on an uphill path with a great local economy, many prospects and partnerships in the works that could bring the parish additional jobs and the parish’s performance was well above standards. Today, the parish’s prosperity has taken a hit by the stay-at-home orders and social distancing guidelines the novel coronavirus has brought on.

Masingill is being proactive and has a plan in place to hopefully return to pre-pandemic levels of prosperity and keep on a positive track for the future. Masingill is focusing on what can be done in the future to best ensure the parish remains a place of choice to work, live and play for decades to come.

St. Tammany’s unemployment rate dramatically rose in 2020 because of COVID-19. During the height of COVID-19, 50,000 St. Tammany residents sought unemployment benefits. Many of the parish’s industry sectors were hit very hard. Those that were hit the hardest were hospitality, tourism and restaurants. The Ceo explains that the parish’s revenue has been reduced but some of it is slowly returning. The parish might not see as much motel/hotel sales tax nowadays but taxes from grocery stores and hardware stores have spiked.

Masingill reports that there are some companies that are busier than ever because of the change in spending habits due to the novel coronavirus. In St. Tammany, the logistics, transportation, warehousing and distribution sectors have boomed. The parish has thrived in this industry because of its geographic positioning and the talented workforce it has living among it. Masingill believes this shift is because the global supply chain has changed. “Even with the vaccine coming online and the economy getting energy behind it, there’s little doubt that some things about the way we do business have fundamentally changed forever,” he relays.

People are currently hiring and job postings for the month of November 2020 were at 7,000 unique postings. St. Tammany residents are still spending money and there is a rebound in consumer confidence but the recovery will be slow. We should understand that there will be ups and downs to the long-term recovery. “There is no quick fix. We’re talking several more months, and some people predict several years, before we see the same level of economic activity we saw in 2019,” Masingill states.

St. Tammany is very lucky that it is home of some of the most educated people in the area. It is reported that 40% of the residence in St. Tammany hold a college degree. Masingill wants to focus on keeping its residence local to work and not go out of the parish for employment.

It is in the perfect location and the parish has access to things people want. The parish is in the top 10% of the most populous counties/parishes in the United States. Masingill continues to keep the area in the top 10% and believes that quality of life is just as important as sustainable growth, job creation and business development. “You want a nimble and resilient community. If you have that, you can rebound that much more quickly when things like a pandemic happens, when a hurricane happens.”

Overall Masingill feels that balance will be the success of St. Tammany’s robust economy. “There’s a balance. (You have to be in the middle.) That’s the sustainable and smart approach. We want our kids and grandkids to either stay here or have a place to come back to where they can reap the benefits and enjoyment of a place where they can have access to the things they want. That’s educational opportunities, job growth and expansion, a place to enjoy all the things our community has to offer,” says Masingill.

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Rates Stay Near Zero Due to Fragile Recovery

 The Fed has determined that rates will stay close to zero for several years to come due to the long recovery ahead from the pandemic. The key short-term rate was close to zero after the latest Federal Reserve policy meeting last Wednesday.

American consumers and businesses are struggling because of COVID-19 and will continue to struggle if Congress, the White House and the Fed do not do more to help stimulate the country’s economy.

The Federal Reserve has already slashed the interest rates and started many lending programs as well as other stimulus efforts to support the national economy. It will continue to buy Treasury bonds and mortgage-backed securities.

“Economic activity and employment have continued to recover but remain well below their levels at the beginning of the year,” the Fed said in its statement.

The Fed believes that the course of the virus can determine the path the economy will take. There is hope from the American people with the COVID-19 vaccines becoming available. People will begin to go back to normal spending habits and activities.

The country’s gross domestic product is anticipated to a 4.2% rebound next year. The Federal Reserve also predicts the unemployment rate will go back down to 5% in the year 2021.

“With vaccines on the horizon, the Fed’s economic projections for the next few years all got an upgrade, but don’t gloss over the immediate challenges still confronting the economy,” said Bankrate chief financial analyst Greg McBride in a report after the Fed announcement.

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A New and Unique Playground For Covington’s Bogue Falaya Park

 Bogue Falaya Park in Covington will get an ADA-compliant playground this winter. Last week David LeBreton of Digital Engineering, city councilman Mark Verret, mayor Mark Johnson, city engineer Callie Baker and Hunt Ragusa of Brunt Construction let a groundbreaking ceremony for the new playground.

Bogue Fayala Park is located on the south end of New Hampshire Street and Park Drive. The park holds many community events and has a pavilion available for rent. Residents can enjoy the playground and the

new boat launch where they can canoe, kayak and stand-up paddle along the Bogue Falaya River which winds through the park.

Plans for the ADA-compliant playground will include ramps that will lead up to the structure along with rubber surfacing around the structure which will make the playground wheelchair-accessible. There will be shade provided by shade canopies and play structures that incorporate core strength. The walking path that circles the interior perimeter of the park will also be paved.

The new handicapped-accessible playground and paved walking path are slated to be done in early February. Covington is funding half of the project while the other half will come from a Land Water Conservation Fund grant. The total project will cost $443,026 and will be constructed by Brunt Construction.

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September Sees Gains in Single-Family Permits

 September 2020 brought a 10.2% increase over September 2019 in single-family permits issued year-to-date (YTD) according to the U.S. Census Building Permits. In fact, the report shows that over the first nine months of this year, the total nationwide climbed to 713,286.

As for each region of the country, the year-to-date ending in September varied. For single-family permits the Southeast saw the highest increase at 12.4%, the Midwest came in at the second-highest

with a 10% increase, the West had a 6.3% increase and the Northeast saw the smallest increase at 6.2%. Multifamily permits did not fair so great. Every region saw a decline with the biggest decline in the West at -9.4%, the Northeast had a decline of -7.5%, the South at -5.6% and Midwest had a decline of -2.7%.

Among the states, only 42 states had a growth in single-family permits while the remaining 8 states and the District of Columbia resulted in a decline. The record highest growth was seen in South Dakota from 2,186 to 2,885 making this a 32% increase. The District of Columbia saw the steepest decline with a 22.2% drop from 126 to 98.

The multi-family sector was not so lucky. YTD only 18 states showed growth while the remaining 32 states and the District of Columbia showed a decline. Mississippi had the biggest increase from 246 to 588 while New Hampshire had the largest decline from 1,148 to 386.

The top 10 metro areas with the highest number of single-family permits were:

Metropolitan Statistical Area	Single-family Permits: Sep (Units #YTD, NSA)
Houston-The Woodlands-Sugar Land, TX	35,309
Dallas-Fort Worth-Arlington, TX	31,631
Phoenix-Mesa-Scottsdale, AZ	22,566
Atlanta-Sandy Springs-Roswell, GA	20,013
Austin-Round Rock, TX	15,327
Charlotte-Concord-Gastonia, NC-SC	13,258
Tampa-St. Petersburg-Clearwater, FL	11,683
Orlando-Kissimmee-Sanford, FL	11,367
Nashville-Davidson-Murfreesboro-Franklin, TN	10,429
Washington-Arlington-Alexandria, DC-VA-MD-WV	9,933

The top 10 metro areas with the highest number of multifamily permits were:

Metropolitan Statistical Area	Multifamily Permits: Sep (Units #YTD, NSA)
New York-Newark-Jersey City, NY-NJ-PA	31,160
Houston-The Woodlands-Sugar Land, TX	15,967
Austin-Round Rock, TX	15,294
Los Angeles-Long Beach-Anaheim, CA	12,095
Miami-Fort Lauderdale-West Palm Beach, FL	11,994
Dallas-Fort Worth-Arlington, TX	11,862
Phoenix-Mesa-Scottsdale, AZ	10,717
Seattle-Tacoma-Bellevue, WA	10,580
Nashville-Davidson–Murfreesboro–Franklin, TN	8,256
Minneapolis-St. Paul-Bloomington, MN-WI	7,881

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Mortgage Demands Still on the Rise

 Mortgage rates have been dropping now for twelve weeks in a row. The last week of November was no exception. Mortgage applications increased 3.9% in volume the last week of November according to the Mortgage Bankers Association’s seasonally adjusted index.

“Weekly mortgage rate volatility has emerged again, as markets respond to fiscal policy uncertainty and

a resurgence in Covid-19 cases around the country,” said Joel Kan, MBA’s associate vice president of industry and economic forecasting.

Refinance applications rose 5% which was the highest since last April. The volume of refinancing was 79% higher than this time last year. In fact, refinance was 71.1% of the total mortgage activity. According to Black Knight, a mortgage technology and data provider, today’s average mortgage rate is about a full percentage point lower than it was a year ago.

The average contract interest rate for 30-year-fixed-rate dropped to 2.92% with the points falling to 0.35 for loans with a 20% down payment. Even with the higher home prices, buyers are still on the winning side with such low rates. Mortgage applications to purchase a home were 19% higher than this time last year.

“Amidst strong competition for a limited supply of homes for sale, as well as rapidly increasing home prices, purchase applications increased for both conventional and government borrowers. Furthermore, purchase activity has surpassed year-ago levels for over six months,” Kan said.

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Home Values Will Keep Rising Into 2021

 As with everything supply and demand also impacts the housing economy. In today’s economy, there is still uncertainty because of the pandemic. As we reach the end of 2020, home prices are still on the rise and are predicted to keep on the same path into the new year.

The current housing market is lacking still in inventory. The high demand for housing combined with the

lack of inventory is pushing home prices up. Bidding wars are becoming the norm and homebuyers are willing to pay the hefty price tag in today’s real estate market.

According to housing experts, the new year will continue to see home prices rising due to the continued lack of home inventory on the market. Showtime, which tracks the average number of buyer showings on residential properties, reported that buyer showings are up 61.9% this fall compared to the fall of 2019.

“Since the beginning of the COVID pandemic in March, nearly 400,000 fewer homes have been listed compared to last year, leaving a gaping hole in the U.S. housing inventory,” according to ShowingTime.

If you are in the market to purchase a home, reach out to a Realtor. A Realtor will be able to help you navigate the current face-paced housing market.

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