Many remodelers I’ve met with or spoken to in recent months have told me their remodeling businesses are doing as well as they ever have. They’ve told me business is back to the level it was before the housing bubble burst. Many other remodelers have told me that business is the best it has been since the bubble burst, but not quite back to pre-bubble levels. The point is, business is good for many of you and it continues to improve for more remodelers each day.
At the same time, most remodelers, including those whose businesses are hitting on all cylinders, continue to face many challenges. I’ve listed below some of the challenges I hear about most often. It’s certainly not a comprehensive list, but it’s one I think you can relate to.
While attending the Remodelers Advantage Summit in Las Vegas several weeks ago, a remodeler and I were discussing the remodeling market and specifically his business. He told me his average job size had dropped from a pre-bubble level of $50,000 to an all-time low of roughly $10,000, but in the past two years has jumped up to about $30,000. To compensate for the lower job size, of course, the number of jobs has dramatically increased. This is just one example, but it demonstrates the lingering fear clients have about spending money, and that the country’s economic recovery isn’t for real.
Wherever I go, I repeatedly hear remodelers tell me that despite the general improvements in the condition of the nation’s housing market during the past 18 months, it remains difficult for homeowners to get loans to fund their remodeling projects. Remodelers tell me that clients with money in the bank have been supporting the remodeling market the past few years, and certainly not the banks. However, anyone who walked the aisles at the Remodeling Show in Chicago last month might wonder what the truth is, because there appeared to be more lending institutions with booths than I can remember. I spoke to a few of those lenders and they insisted they are ready to provide funding to homeowners through remodeling firms. Some lenders specialize, such as in FHA loans, but they were there, looking for remodelers to help give money to homeowners.
In the same way homeowners struggle to spend more on their remodeling projects, remodelers hesitate to hire staff when the workload demands it, which is right now for many of you. The unending ups and downs of the uncertain recovery — two steps forward and one step back — give pause to remodelers on the verge of hiring extra employees. At any time before the bubble burst, this would have been a simple business decision. The mind games the economy has been playing, however, have remodelers making business decisions based partly on emotions, which can be unfamiliar territory.
Remodelers took financial beatings during the economic downturn just like most Americans, and forced them to adjust their retirement plans. Those approaching the traditional retirement age of 65 are considering postponing retirement to age 70, or even 75. Will they remain healthy enough to work that long? Will they have the energy? Will homeowners hire remodelers still working at such an advanced age?