Our year at Dakota Builders looks like it will wrap with maybe a 5% drop. I’m not sure that’s attributable to the housing market. The change is so slight I’d spend more time diagnosing the cause than it justifies.

Here in Southern Arizona, housing is down about 50% from the peak of 2005, taking about two years to get there. Next year’s housing starts are expected to be flat or just slightly higher. So what does that mean for remodeling?

Similar to the government’s durable goods forecasting, when people don’t buy new houses a lot of other things don’t get purchased. First, all the "new" things — new patios, new den conversion, redecorating — don’t get purchased.

Second, if no one is buying a new house, then some existing homes aren’t being sold either, right? Given that a significant amount of remodeling is done just before and after a sale, certainly that’s a factor to consider.

When home owners start to question their equity situation and property values, they also tend to pull back from major purchases. The home addition that seemed to make economic sense last year is now questionable. The equity home owners were going to use for the new master suite may have just declined and so forth.

While perhaps this isn’t the year to break records, it also doesn’t have to be time to retreat and hibernate. There will always be prospective customers with needs independent of economic conditions, maintenance and repair items that can’t wait and long-term goals that outlive a one- or two-year cycle.

There are things you can do to maintain a reasonable amount of work. Your company’s "best" project or "sweet spot" may need another look. Only you can decide if you’re able to adapt, of course.

If your best project has historically been the whole house remodels or additions over $200K, it might be time to consider whether you can profitably tackle baths, kitchen, porches, decks,or other smaller scale projects. You’ll have to consider labor, in house capabilities, market audience and more to make this assessment.

Maybe it’s time to contact that old customer list and remind them that “we do small jobs too.” If they only remember you as the firm that added 1,000 square feet to their home, they might not think of you for a bathroom facelift or new deck.

And speaking of contacting people, that’s where NAHB Remodelers can help. Where else can you find a group of like minded professionals who feel your pain and have successful coping strategies to share?

NAHB Remodelers has a deep network of remodelers, vendors, suppliers, and trades to give advice, and serve as a referral source. As association members, we all realize we’re in this together, and only by keeping strong and profitable can our association thrive. So it’s in our best interest to help out our fellow members.

The online resources, business tools, marketing and management tips, employee and company policy advice alone are worth multiple times your membership, and it’s all there for the asking. Take advantage of your local membership opportunities, make every meeting an occasion to chase leads, build relationships, and renew or strengthen old ones.

Contact Greg at gam@dakotabuildersinc.com or visit Dakota Builders. [return to top]