Two Hammers

The customer freeze during the first quarter is finally thawing out, and remodeling projects are starting to hit the drafting table.  For those that survived the worst quarter in recent memory there is a glimmer of hope.  We are projecting remodeling activity at 80% of the level of one year ago, not ideal, but acceptable.  Gone are the home equity line remodel projects which were so popular for the past several years.  Now projects will be either maintenance driven remodels, or for customers who are immune from recession.   This will actually be good for the industry, the home equity remodels always seemed to have the budget raided for a new car or a big screen tv.  Remodeling projects now should be of better quality with more stable budgets, and more committed customers.  Thus, these projects should be more profitable, and well established contractors will survive.

Lately in southern California there has been a slow down in the housing market. One might even argue, a necessary slow down in an over heated market. What has this done to the remodeling market? Not much; homeowners are still remodeling. Though the dollar value per project has decreased, homeowners still want to fluff the feathers in the nest.

So why are remodeling contractors starting to cry about the lack of business. Well, it is the competition; competition from the “new home builders” entering the market. Their market has all but dried up, and I guess that even “trackies” have to eat. So, they migrate to where the work is. And swinging a hammer is swinging a hammer. Except, remodeling is a different business from ground up construction; there is usually a family living in the house, customers have different expectations, and there is a different set of pitfalls.

Customers and contractors be aware. Would you go to an optometrist to get your teeth cleaned? Contractors – let us not add to our already dismal reputation.