Small Homebuilders Taking on Remodeling Work

Washington, DC, Oct. 13, 2008--Contractors are bending over backward — even for small jobs like bathroom renovations and cabinetry — as the housing slump infects the remodeling industry. That gives homeowners the upper hand in price negotiations.

While not taking the hit that the for-sale market is, home remodeling has slowed as pessimism about home values sets in. Activity remained sluggish in the second quarter, according to an index from the National Association of Home Builders (NAHB), and expectations for future activity were nearly flat.

Total money spent on home improvements and maintenance is expected to dip more than 4 percent this year, to $216.3 billion from $226.4 billion in 2007, the NAHB estimates. The group doesn't expect spending to reach 2007 levels again until 2010.

The pain is most acute in markets where home values are sliding.

These homebuilders are snapping up larger remodeling projects like additions, recreation rooms and porches, which can run as high as $400,000, said Alan Hanbury Jr., treasurer of House of Hanbury Builders in Newington, Conn.

"They've never done that before," Hanbury said. "They're literally looking for remodeling work whereas three or four years ago they pushed it off to guys like us."

Remodelers are tightening their wallets and courting business they wouldn't otherwise to survive.

This is good news for homeowners who want to make renovations, Hanbury said; they have more bargaining power and more qualified remodelers to choose from.

Miedema is taking calls he wouldn't have taken a few years ago, including for smaller jobs, and from homeowners who seem less committal and those a bit out of the way.