As Home Depot Goes, So Goes the Nation

Is Home Depot a believable bellwether of good news for the California real-estate market? Chairman-CEO Frank Blake thinks so, and he may be right. Of all the states, California and Florida were among the most painfully impacted economies in the U.S. recession that began in 2008. When home sales and new-housing starts are down, as they have been for several years, it only makes sense that there are fewer homeowners in need of lawn equipment, paint, fixtures, and the like. The current purchasing trend at Home Depot shows that, while transactions under $50 fell in the first quarter of 2012, transactions in excess of $900 rose 3.4 percent. The most notable revenue increases were seen in California and Florida. According to Blake, this spending pattern means homeowners are feeling more confident about the future of their home value, so they are more willing to spring for bigger-ticket items like lawnmowers. Although there are no Home Depot stores in San Francisco proper, there are thirty in the immediate Bay Area. As of August 14, 2012, the retailer saw a $1.60 uptick in its stock price, and that correlates nicely with the recent, unmistakable rise in San Francisco real-estate values.