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Homeowners looking to remodel will find contractors willing to negotiate

a swatch of the Versetta Stone panelized stone veneer from Owens Corning Masonry Products LLC. This is hand-painted and looks like real stone to me, but it is concrete on a panel that can be nailed or screwed into the wall.
a swatch of the Versetta Stone panelized stone veneer from Owens Corning Masonry Products LLC. This is hand-painted and looks like real stone to me, but it is concrete on a panel that can be nailed or screwed into the wall. (Owens Corning Masonry Products Llc)

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By Sandra Fleishman
Special to The Washington Post
Saturday, September 25, 2010

With homeowners holding on tighter to their hard-earned dollars -- or trying the do-it-yourself route -- remodelers are fighting to hold on to business by offering to do more for less, said remodelers and experts at this month's annual Remodeling Show in Baltimore.

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Some remodelers are cutting their margins sharply; others are willing to do competitive bidding again; and some are offering faster completion dates or more services than before, said industry experts such as Sal Alfano, editorial director of Remodeling magazine, a co-sponsor of the show. "This market is good for homeowners, but not for remodelers," Alfano said.

For a while this summer, it seemed the worst was over. Harvard University's Joint Center for Housing Studies in July issued its Leading Indicator of Remodeling Activity (LIRA), projecting that national homeowner spending for improvements would be up 5 percent in 2010 over 2009 and that the market would continue to improve in the first quarter of 2011.

But then the National Association of Home Builders, another show sponsor, reported a drop in demand for current and future residential remodeling projects from the first quarter of the year to the second quarter.

So who's right? It's too early to tell, said Harvard's Abbe H. Will. "We are projecting that the market bottomed out this quarter and should start to turn back up by the end of the year, but 5 percent growth off of the bottom of the market still doesn't bring the market back to necessarily healthy or sustainable levels," Will said.

Homeowners think they can get a deal on remodeling, said those at the remodeling show, and so, just like in the home-buying arena, they're low-balling what they're willing to pay.

"Homeowners today want everything for nothing," lamented Greg Eskers, a longtime remodeler from Connecticut. "They think because nobody's working that they can get a lot lower price."

Brad Lundberg, a builder and remodeler for 33 years from Stevensville, Md., on the Eastern Shore, said business "has actually been fairly steady because we've been in business for a long time and get a lot of clients who come back."

Established businesses often have referrals and return business to count on. Not so lucky or busy, speculates Lundberg, are newcomers who jumped in when the sky was the limit for home prices and the remodeling market was going strong.

Lundberg doesn't dispute that clients are scarcer now, but he said that "you can't lump everyone into one group. We have people coming in who have been waiting 25 years [to remodel] and finally have decided it's time to do it. And they're in a good position, because they've been saving and now prices . . . have come down" for some products and services.

"We do work for customers from those who are having a baby to those in their 80s," he said. Some work, he notes, can't be put off.

Also, areas with some economic cushion -- such as the Washington region, where unemployment is lower than the national average and high salaries remain the norm for many residents -- still have a reserve of homeowners who have been waiting to get a contractor to answer the phone and who can afford big renovations, say local remodelers.


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