Remodeling During Booms And Busts

Foundation for the new house going up down the block!

Foundation for the new house going up down the block!

There’s a new home going up on our block. And another going up one block over. And another a few blocks down from that. There aren’t many empty lots left in our neighborhood for new construction like this.

We are deep in the middle of our kitchen renovation. Our neighbors have started their renovation. Walk three houses the other way and you’ve got a pair of homes sitting next to each other that have had pretty extensive remodels (including the kitchens). And on the other end of the block is a house that had a complete gut remodel with a brand new kitchen installed. All of this within the last year.

Our street just isn’t that long. Five (5!) of the 28 homes on our block have had extensive remodels (including kitchens) in 2015. That’s 18%. More than 1 in 6. In our six years of living in our little house, we’ve never seen remodeling and building activity like this in our (mature, but not particularly “aging”) neighborhood. I’m not an expert, but I’m calling what we’re seeing a local “building/remodeling boom”.

This is definitely NOT what it was like the last time we were doing major remodeling projects in 2009-2010 (major repairs after buying our house that had been neglected and foreclosed on) and in 2011 (making our duplex livable/rentable after it had been foreclosed on). We are in one of the worst-hit areas of the country when it came to the real estate bust of a few years ago and until this kitchen remodel, our experiences during that bust had been kindof a baseline for us of what remodeling and home improvement projects look like. Turned out, we’d been looking at one extreme (the “bust”) and I think we’re pretty close (at least locally) to looking at the other extreme (the “boom”).

And they are so very, very different…

Pricing

Material prices haven’t gone up all that much from what we can tell. Roof shingle prices that we quoted on our permit application in 2010 have changed by 2.3% in the last 5 years. Copper prices (for plumbing) have been trending down since 2011 as well.

Labor is a different story. Back in 2009 and 2010, there were more laborers than there were jobs to go around. Today, it’s the opposite. Tradespeople (especially experienced ones with good reputations!) are highly in demand. And they (rightly so) are adjusting their prices upward accordingly. One particularly labor intensive job (new duct work for our house), we’ve now quoted out twice – in 2010 and in 2015. The 2015 price was 60% higher.

Timelines

In 2009-2011, it was so easy to find a company that could work on whatever schedule you wanted. If you called for an estimate, they might be able to send someone out that afternoon to meet with you.

Now sometimes it’s a week or two to get an estimate and the best contractors are booked months in advance! (One tile guy we got a quote from in August said that his next available opening would be January…) Sometimes it’s even materials (like our tile) that are out of stock because demand has been through the roof and suppliers can’t keep items on the shelves and we end up waiting a month or more for delivery.

Even dumpster rentals have gotten crazy! When we rented ours back in 2010 to replace our siding and part of our roof, the dumpster rental place let it stay at in our driveway for a couple of months (our neighbors no doubt loved that!) while we finished our projects without paying anything extra. But when our neighbors rented theirs recently, they had a tight 2-week window on their dumpster rental or they’d need to start paying more since the dumpsters are in such high demand these days.

Help and Advice

As primarily DIY-ers, we take all the low-cost help and advice that we can get. And in the bust years it was almost embarrassingly easy to find. When we walked into Lowes as new homeowners, a former contractor (we’ll call him Dave) basically served as our personal shopper on and off for months. We’d walk in with our lists, end up lost and somehow Dave would come rescue us and walk us through the store with our list and cart not only loading us up, but giving us how-to tips and advice along the way. (Dave had to have been seriously underpaid for the level of service we got.)

These days, Dave is long gone (and we presume on to greener pastures, so good for him!). In his place are helpers that can’t even multiply or divide so aren’t always all that helpful…

While loading 20 pieces of 1/2″ ultra-light drywall into a rented Home Depot truck earlier this year…

Home Depot Helper (HDH): We might be getting close to the weight limit of the truck.

Mr PoP: It says the weight limit is 3,500lbs, I think we’re fine.

HDH: It’ll make a really loud beep if we load too much.

Mrs PoP: We’ve only got 20 sheets here. With a limit of 3,500lbs, each would have to weigh over 150lbs before we’re even getting close to the limit. They can’t weigh nearly that much, so I think we’re fine.

HDH: Blank stare… It was like I blew his mind with multiplication.

Mr PoP: We’ll stop if the truck starts to beep, we promise.

HDH: okay…

After getting in the truck… we both sighed and agreed that Dave would have known exactly how much each piece of drywall weighed. (Turns out the answer is 40 and 48 lbs each for the two different kinds we were getting. We were way under the weight limit.)

Needless to say, we’re not walking in to Lowes or Home Depot these days expecting to be able to talk with someone with years of trades experience under their belt the way we could just a few years ago. And that’s good for those tradespeople because they’ve found higher paying opportunities elsewhere, but it means we need to find our help elsewhere and go to the store knowing exactly what we need and where to find it.

We’re Different Too…

Back in 2009-2010, our income was roughly 1/3 of what it is today. While we weren’t exactly at a “bust” level of income then, we are definitely “booming” today by comparison. Back then we were DIY-ing major repairs because it was pretty much the only way we could afford to do them (and there was no putting off replacement of rotting wood siding and roofing). It was sometimes stressful coming up with the money from month-to-month to pay for the renovations.

Now we’re DIY-ing major cosmetic changes because that’s the only way we choose to pay for them. And it feels very different. Where we were a lone fish swimming upstream through an empty river, now we’re one of many swimming downstream all at once, competing for resources. And while there’s a certain amount of camaraderie that we’ve found in renovating at the same time as so many of our neighbors, friends, and coworkers, I’m not sure that outweighs how hectic it has felt at times trying to do our renovation at the same time as so many others. =P

 

What’s it like in your neck of the woods? Would you rather remodel in a boom or in a bust?

17 comments to Remodeling During Booms And Busts

  • Glad the new place is coming along. You guys bought that lot right. Congrats on your instant equity. Up here in Tampa, it’s pretty much as you described. The contractors and laborers are busy, but material prices haven’t moved much. I suspect that lower copper, steel, and especially fuel prices are to blame. I am not complaining.

    My road construction projects (at work) are much the same. Costs for some of the road projects we shelved in 2005 and 2006 are coming in within 10% now. Yeah, 10 years later. Of course the other side of that statistic is that prices spiked during the building boom so those 2005/2006 construction prices were WAY overblown.

    In regards to your question, I always feel better in a recession. Being a “limited downside” kinda guy, I like it once the shoe has already fallen. It’s much better than when the economy is riding high.
    -Bryan
    Income Surfer recently posted..Planning a Trip?!My Profile

    • Commodities being down definitely seems to have leveled prices, though I would have hoped for a break on the asphalt shingles with oil being so much lower than it was in 2009!

  • Boom in my home town. Maybe we’ll put off that kitchen renovation another few years! We’ll see.
    nicoleandmaggie recently posted..The CSA will take over your lifeMy Profile

  • This isn’t something I’d ever think about. The Albany NY area didn’t experience a boom or a bust since we have so much institutional employment and a pretty dull housing market (not a vacation destination or a NYC sized job market). I just called for an electrician and a plumber for our apartment and got them both within a week. They’re just going to do the work, though. If I had to compare prices, etc, sometimes it would end up taking so long I’d rather just learn it and do it myself.
    Norm recently posted..Ridinkulous Quarterly Expenses: Q3 2015My Profile

  • It definitely sounds to me that remodeling during the bust was preferable. Has your timeline been extended because of the current competition for materials and labor?

    I suppose Seattle is booming but I haven’t really noticed! Maybe it’s not so intense in our neighborhood.
    Emily @ evolvingPF recently posted..September 2015 Money Puddle and Spending ReportMy Profile

    • I would say the timeline has definitely been extended by difficulty getting materials and labor at different times. Tough to quantify exactly how much since we’ve “made do” trying to move on with other parts while waiting, but I’d estimate it’s added at least 4-8 weeks so far.

  • Our campus has a building boom, but it’s been mostly good for us too. We’re making major capitol improvements, and some of that includes fixing stuff in faculty apartments. We got a new sink and countertop (old one was rusting out), and someone came over and fixed our bathroom sink the day after a help request was put in.

    Plus, we are at the top of the list for a much bigger apartment in a new dorm being built. Keep your fingers crossed for us!

    Not the same type of DIY as you, but it still feels very boom-like here. It is fun to watch everything go up. Looking forward to the new look around campus come spring when most of the renos and building should be done.
    Leah recently posted..Time and seasonsMy Profile

  • It’s interesting how things like this ebb and flow. The state of the economy has a big impact on when people choose to remodel and build new houses too.
    Cat@BudgetBlonde recently posted..4 Ways to Know if Working From Home Is Right For YouMy Profile

  • I would rather be doing it against the grain, so during a bust. Just like buying stocks when everyone else is selling, the best deals can be had when the economy is in the crapper.

    I have been waiting to buy the new wood/bamboo flooring until I find a great deal. I will install it myself with a friend’s help. We need new carpet upstairs too, but I don’t want to do that install (especially the stairs). I am hoping to find someone that will give me a better deal if we wait until they get a cancelled install and fit us in.
    Vawt recently posted..Cutting the Cable CordMy Profile

  • Heidi

    I never thought about it this way, but you’re completely right! A few years ago, the people at Home Depot were fantastic and knew their stuff. Last week I went to HD and asked for wood cut to 20 2/10″ and the guy looked at and asked which line was 2/10 on the measuring tape ?!?

  • Ha haaa! That is a GREAT Home Depot story. And it’s true: the skilled guys (and sometimes gals) who work there during a recession go back to decently paying jobs when the economy turns around. On the other hand, you have to wonder about schools that turn out kids who can’t figure out that it would take one heck of a lot of 150-pound units to add up to 3500 pounds. Once, years ago, when we took three kids to the Monterey Aquarium in California, the young teller (college freshman age?) could not for the life of her figure the change for $80 from a $100 bill. In trying to help her, my husband discovered she could not count by 20s.

    No question, things are booming like crazy around here. Despite the higher prices for homes, we’re having a fixer-and-flip craze. Guess the continued low rates will continue to drive housing prices up again, and that will drive a lot of home improvement and renovation.
    Funny about Money recently posted..Reality or Illusion? The Growing Complication of LifeMy Profile

  • It’s amazing how much things change over even just 5 years. Just like you said about pricing and the demand for jobs, remodeling is such an unpredictable market. We budgeted for a project based on an estimate we had gotten a couple of years ago, and we were way off. The only thing that cost what we estimated it would was the roofing, and everything else was about 20% more expensive than our old estimate.

  • We’re really lucky to be in a growing metropolitan area right now. There is a ton of demand for new homes, and they’re selling at the same price as some of the higher end homes up near the canyon. And with so many homes being built and the success of related contractors, prices are going down to ensure they keep their customers.

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