Are Real Estate Agents Contributing to Home Depot’s Growth?
According to numerous sources, yesterday afternoon, Home Depot reported earnings that went skyrocketing in their fourth quarter, way beyond Wall Street’s initial expectations. Based on the store’s reports, this home improvement empire has gained $1.69 a share in earnings this quarter, versus the $1.61 that was suspected by analysts at Thomas Reuters. The stock is up 42% from last year, which is no doubt a lot for the store to celebrate.So, what is the spike in this store’s fourth-quarter due to, and is it something real estate agents and homeowners should be taking note of? Or, was it just a lucky quarter for Home Depot? Before you sell your stock, let’s take a closer look.
What this Says About the Housing Market
If the buzz is saying that the housing market isn’t doing well, then this news kind of proves otherwise. It’s indicative that people are continuing to buy and sell homes at a rapid rate. Not only that, but they are also able to start huge renovation projects in their homes that they may have not been able to afford before. And, since we know that every home on the market probably needs some renovations, simple paint jobs, or crafty DIY projects, people need to buy their supplies from somewhere. In this case, it’s not the local hardware stores that are profiting, but the big guys – Home Depot.
But, before such a blanket statement is made, it’s also important to note that Home Depot also profited off of disaster. Due to the hurricane in Puerto Rico, volunteers have purchased supplies from Home Depot to help rebuild homes. Therefore, it’s not necessarily a correlation.
Tax Cuts and Business Models Play a Role
Any wise real estate agent should be keeping up with the news coming from Washington, to learn how it might affect the communities in which they work. For instance, the tax bill that President Trump signed into law at the end of 2017 will no-doubt change tax laws which will directly impact the housing market. Unfortunately, it’s still not entirely clear what will happen, but as of now, the housing market is still looking really good.
This tax bill also means that big companies, like Home Depot and Lowe’s, are also getting tax cuts. With the extra money, they plan on providing their employees with bonuses, which is excellent news for the entire industry, and the economy as a whole. More money and more jobs means more people buying homes, too. In the meantime, Home Depot is still outshining their competition, and will continue to do so Recently, they’ve signed a deal with Tesla, while companies like Amazon strive to keep up with Home Depot’s special business model.
Your Role as a Real Estate Agent
So, to say that your job has directly impacted the news coming from Home Depot might be a bit of a stretch. But, that fact that it’s the largest home improvement store and you’re in the business of buying and selling homes, means that these things are related to some degree.
When you sell a fixer-upper to someone, it’s likely that the first thing they are going to do is hire a contractor to run out to the nearest Home Depot and get the necessary tools and items. When you sell an old home to a young couple, it’s likely that that first week they will run out and buy some new appliances to finish the kitchen with. Additionally, as a real estate agent, you may hire someone who buys things from Home Depot to do a staging on an open house, or get a copy of a key made so you can get in.
In some ways, this all ties together. If a store like Home Depot is doing well, hopefully that means you are doing well, too, and vice versa. Although we can never base all our predictions or beliefs off of one event, it seems that right now, things in the housing market seem to be pretty healthy. And, that’s excellent news for any real estate agent!
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