Qualified Remodeler’s Top 500 list, now in its 33rd year, represents some of the top firms in the industry. It also acts as a kind of barometer of industry leaders—an indicator, though perhaps not a leading indicator. The Top 500 average remodeling revenue in 2009, for example, was $8.4 million. For 2010, the figure rose marginally to $8.8 million, paralleling the modest gains shown by other industry sources.
Put another way, total revenue for all of the Top 500 firms was $4.2 billion in 2009, climbing to $4.4 billion last year. More interesting, the total range from 2004 to 2010 hasn’t varied outside of the $4 million range.
The Top 500 remodelers, it appears, were not immune to the vicissitudes of the economy but fared better than many. The significant gain in average and total revenue between 2003 and 2004 never entirely evaporated. Average revenue in 2003 was $7.1 million and total revenue was $3.5 billion; the numbers of the Top 500 never dropped below the 2003 level in the ensuing seven years.
Qualified Remodeler asked a sampling of those on this year’s list to share their reactions to what have been challenging times for many remodelers. Some of their responses follow.
Q: Has the remodeling business changed dramatically during the past several years, or do you believe this is just one more cycle in the series of booms and downturns that characterized recent decades? What’s in store for the future?
This is yet another pendulum swing in our recurring economic pattern but it is a deeper recession than normal, to be sure. This recession was exacerbated by flawed mortgage regulation policy.
The future will provide opportunity by correcting and replacing an aging inventory of existing houses, correcting the many subtle errors our industry has made as a result of misunderstanding rapidly changing building technology. The green revolution (sustainability) is substantially a correction of flawed practices that have created structures that trap moisture and can adversely affect occupant health. Sustainable building practices will require an enormous retraining of our construction workforce to properly assemble—not merely install—the valuable building products and technologies manufacturers are supplying.
—Mosby Building Arts
I believe customers have become more conservative in spending their money. Our responses and closing rates have held up pretty well, but our average sale is down. It is evident consumers are much more likely to pay by cash or same-as-cash financing options, only purchasing products they could write a check for if they needed to. Many customers are now out of the market entirely because banks will no longer finance substandard credit.
We’ve definitely seen changes in the industry throughout the past several years. Our Silicon Valley local economy has had its share of ups and downs. Although it doesn’t feel like a boom period, it feels fairly stable at the moment. That said, this recession and recovery feels like it has taken much longer than in the past. It serves as a reminder that you can never take the future for granted. Being prepared with a strong “war chest” of cash and a commitment to market aggressively to ride out even the nastiest downturn has to be standard practice for us.
I don’t feel that our business model has changed. Our clients still want a professional level of performance. We tightened our belts in 2009 and 2010, including letting go staff that was underperforming in key positions. We worked through the slowest part of the market with the reduced staff and then rehired strong players during the past 12 months. Refilling the empty seats with strong players has made us a stronger team.
—Boardwalk Builders Inc.
I don’t see a dramatic change in the product that remodelers offer, but marketing and business strategy is continuing to evolve as a result of the recent economic trauma.
—Dave Fox Design Build Remodelers