Bethesda, Md., remodeler Mark Scott has noticed the spec housing market dying in his area. The owner of Mark IV Builders — who got his start in commercial construction and moved into spec homes before switching over to remodeling —knows from experience that many of those builders will turn to home improvements.
“They'll use margins that are way too small for remodeling,” he says. That will lead to them underpricing their projects, which will, Scott points out, “screw up the pricing of the remodeling market” by changing customer expectations of what they'll have to spend.
It's a temporary problem — “It will take them eight months to a year to go out of business or to realize that remodeling is a lot harder than they thought, and move on,” Scott says — but one that necessitates planning ahead. “I've stepped up my marketing by about 100%,” he says. “I'm assuming that we will convert fewer prospects, so I need more prospects to try to convert.”