Advantage, homeowners

Market shift puts renovators in the driver's seat when hiring contractors

Laura and Neil Robbins of Maynard were prepared to spend $110,000 to renovate their 1905 Victorian. (Ellen Harasimowicz/for The Boston Globe)

When Laura and Neil Robbins began remodeling their Maynard home last year, they entered with a mindset that would have been laughable during the housing boom: They expected contractors to be responsive and willing to compete for their job.

Many homeowners have war stories about remodeling projects: contractors refusing to bid or tossing up outrageous quotes, work crews disappearing for days, and punch lists repeatedly ignored.

But the Robbinses had an advantage other homeowners didn't have just a few short years ago: A slow real estate market that has carpenters, plumbers, and other tradesmen hunting for work. The couple stuck to their rule that at least three contractors would have to bid for each component of their project.

"We hired people who we thought had a belief in our project and who we thought were easy to talk to," said Laura Robbins, a 36-year-old, self-employed interior designer.

Homeowners, contractors, and housing specialists say the remodeling market has shifted over the past year to favor homeowners. With builders cutting back on new houses, contractors have been keeping their crews busy with additions, kitchen and bathroom makeovers, and other remodeling projects.

"Everything's cut in half, basically," said Brian Melanson, a plasterer and owner of BM Drywall in Leominster. With a work crew cut to three from as many as six employees during the boom, Melanson helped remodel the Robbinses' house. "My work is cut in half," he said. "Employees cut in half. Prices cut in half."

As a result, homeowners interested in remodeling are in the driver's seat compared to a few years ago, when swamped contractors might not have even returned their calls.

"A lot of contractors that I talk to, they'll say 'A year ago I had six months of work ahead of me, now I have three,' " said Howard Chandler, executive officer of the Builders Association of Greater Boston. "If someone calls, they probably are taking it. They're not going to turn down work."

That's not to say a surge of remodeling is sweeping the area. Most remodeling is done immediately before or after homes are sold, so a large chunk of work has disappeared with home sales so slow, said Kermit Baker, director of the Remodeling Futures Program at Harvard University's Joint Center for Housing Studies.

Baker predicted the market probably wouldn't turn around until early 2010. The center's most recent leading indicator of remodeling activity, released in July, predicted homeowner improvement activity would continue to decline by an annual rate of around 11 percent by the first quarter of 2009.

Still, the remodeling market, although weak, is providing a crucial stream of work to the construction industry, Baker said.

In the current economic climate, homeowners such as the Robbinses do not anticipate selling and moving anytime soon, said Baker. They want to improve their living conditions by sprucing up their houses while also taking advantage of the labor glut. "There's a certain amount of, 'If we're not trading up to a nicer home, we're remodeling,' " said Baker.

Susan Burgess and her husband, both in their 50s, made that choice in March when they decided to postpone selling their Cape in Wayland, which they purchased eight years ago. Instead, they spent around $40,000 on their kitchen, which hadn't been upgraded for more than 30 years.

"We wanted to get into a single, prestanding condo, but we decided, you know, it's not the right the time to do that," she said. "So we decided to go ahead and redo the kitchen and stay here for 10 years."

If the market improves and she and her husband change their minds, Burgess said their new kitchen would likely be a selling point, and they expect to be able to recoup their money. In the meantime, she loves the new space.

"I feel like I'm not walking into the 1970s anymore," she said. "I took off five layers of old terrible linoleum. We put in a mud base and a stone floor down on that. All the cabinets were out. Everything was taken off the walls. The appliances, everything works well. All of the storage space fits my exact needs."

Burgess said she had little trouble arranging visits and sealing deals with contractors within a week or two after contacting them. She only hit a bump when shopping around for painters because many were already very busy. "In spring and summer, most wanted to be outside," she said. "That took a couple of months to get someone in there."

Eager contractors might be lowering their own prices, but that is mitigated by continued increases in the cost of building materials, which are 40 percent higher, on average, than five years ago, according to data compiled by the Associated General Contractors of America.

Prices for copper and brass, used in pipes and other fixtures, have risen 165 percent, while plastic construction products are up 33 percent since 2003, the statistics said. One plus is lumber prices have declined by almost 6 percent in the same period because fewer homes are being built, said the contractors group's chief economist, Kenneth Simonson.

How labor and materials prices affect final costs for homeowners depends on the project. A report by Remodeling Magazine, a trade publication, estimates that the price of remodeling a kitchen in the Boston area increased only by $1,000 from 2006 to last year, to $61,000. A bathroom addition, however jumped from $34,000 to $44,000. Data for 2008 was not yet available.

Rodney Batten, an electrician from Westminster who also worked on the Robbinses' house, said the cost of materials adds another challenging twist to an already tough market for contractors.

Batten said prospective clients have told him he will be bidding against a handful of other contractors. He understands why homeowners wanted to shop around, but the rising cost of wiring and other metal items keeps him from slashing his estimates. It's hard enough to even keep costs level, he said.

"They [homeowners] start playing each of us against each other," he said. "Materials are going up. By keeping the same price, we're making less. I don't want to compete against 10 guys. I don't want to be the cheapest."

The Robbinses, meanwhile, were prepared to spend $110,000 to gut the 1905 Victorian they bought three years ago, convert an upstairs bedroom into a bathroom, reconfigure the kitchen, and make other changes.

The couple also had little trouble arranging for contractors to begin work a week or so after deciding whom to hire. The Robbinses were also able to haggle down the price of some jobs. "We've interviewed three contractors and said, 'We like you better. Could you match the other person's price?' We were really prepared," said Laura Robbins. "We always knew what we wanted and we weren't afraid to ask when we had questions."

Some contractors, perhaps still not attuned to the new reality, took themselves out of the running.

"We had a roofer who came to our house and said we should just blow it up," she said. "We did not hire him. I was able to be picky and I am and I still will be."