Real estate remodeling as a leading indicator for stocks

Report reveals 4 US cities' surprise economic strength

Investors look at all sorts of extraneous data points to determine which way the stock market will turn in the near future. Of course, most stock analysts scrutinize the economy or global events, but there are a few who try to predict the future by observing weird phenomena such as whether a team from the old National Football League or the American Football League wins the Super Bowl.

(If there’s a winner from the old NFL, now the National Football Conference, some believe that indicates a bull market is ahead.)

I propose a new yardstick: What’s happening with home remodelers.

Let’s, for example, use Dave Fox Design/Build Remodelers of Columbus, Ohio, as our primary benchmark.

For the first six months of 2011, the company had been on a tear. In fact, its pace of new business through June was very close to that of 2006, and both 2005 and 2006 were absolute boom years for the company.