A Real Estate Reality Check for Home Depot and Lowe's ( My Take )

Diary of a Whimpy REALTOR

Attached is a link in regards to how home improvement outlets have profited during the housing boom and what is happening today in the current real estate market.

The days of the McMansions are over, at least for now, until the next housing boom cycle of real estate. Outlets know this and have the funds to be able to ride the cycle wave. As with the real estate market, financial markets, even the World economy goes through phases, only those astute enough to understand this are the winners.

Home improvement outlets are smarter than the average bear. They have stockholders to account to, and in order to make good to their investors and profit, the first liability they cut is part of the workforce. It is almost similar to what many retailers do during the holiday season, they hire for the boom, and then let go after all the sizzle; only difference is that the real estate cycle lasts a little longer.

Although many people are downsizing during this current economy, the problem is that the American Society has a tendency to forget. Ask the average person about how many times did the stock market crash since 1929. Clueless to many, and retailers know this; and they also know about the "keep up with the Jones" mentality of the general public. What has and still is happening is the I must satisfy my ego compared to what I need for my basics to survive, i.e. food, shelter, clothing.

Unfortunately many in our Society live in ignorance, respectively, either by ignorance alone or by choice. Many choose not to learn about finances and the tool (money) to survive. Credit card solicitations is at an all time high and offering introductory rates, but renege on one payment, and watch that rate sky-rocket. Creditors know it will happen, it's just a matter of when.

So understanding how the market trends / phases operate Home Improvement Outlets will still profit. Funny thing is I am always asked if I am interested in opening an account with them when I am paying for my goods. No thank you.

In closing, I have included the phases of the real estate market according to Dr. Mueller of Legg Mason.