Most will agree that the remodeling market has undergone significant changes in recent years, and remodelers have had to adapt, but does that mean there’s a permanent new reality?

Let’s face it, markets evolve, and the history of remodeling is one of adaptation. So, yes, there are new parameters in the marketplace, but core business practices polished by remodelers over the years, in good times and bad, remain rock solid. Perhaps remodelers today confront less of a new reality than a reality check.

One of today’s realities experienced by most remodelers is smaller job sizes in terms of overall budget. More than 80 percent of those surveyed by Qualified Remodeler reported that non-handyman type jobs showed this trend. The decreases were substantial. Thirty-five percent said budgets were down between 15 and 25 percent, and a nearly equal percentage said budgets were down between 25 and 50 percent.

While a third of homeowners said lack of money or inability to finance were reasons for curtailed spending, a quarter said they were unwilling to take on any additional debt.

No Mystery

What happened? It’s not really a mystery if one looks back a few years. The housing industry, both remodeling and new construction, was riding a wave of easy credit and ever-increasing home equity. “It was almost like free money,” says Les Cunningham of Business Networks, Inc.

On a typical job the homeowners would refinance and get several hundred thousand for remodeling, he recalls. “The mind-set was that the house would appreciate so much, I’ll mortgage out anyway, and I’ll just get my money back,” he explains.

Not that it was uniformly smooth sailing. “In the 1981 recession we got slammed and money went to 21 percent, but then it came back,” Cunnigham recalls. “In the 1989 recession, we got slammed again but then it came back in 1991,” he says. “Right around 9/11 the dot-com bubble burst, but the market took off again.

“With this [current] reset of the economy, the money is gone, the equity is gone and there is no rapid replenishment of that equity, in my opinion, certainly not in the near future,” he says.

Where does that leave remodelers? “A lot of them are just sitting there thinking the bus will start running again, and they’ll just jump back on the bus,” Cunningham says. “I don’t think it’s going to happen like that. Yes, it’s going to come back, but what I see happening now is you have to be basically a small general contractor. If Mrs. Smith wants some steps put up, you put up her steps; if she wants some painting done, you paint; if she wants her siding repaired, you repair it.”