For the past four months, Benoit & Czarnecki’s average project size has been $100,000 — half of what it was in 2007. “On one project, the client bought cabinets from Home Depot,” says co-owner Jim Benoit, a lead he would’ve declined last year.

House prices in Newtown Square, Pa., where the company works, decreased about 5% from 2007 to 2008, but are down 15% in 2009. “Homeowners don’t see the value in adding 2,000 square feet,” Benoit says. Those with small remodels are reviewing five to seven bids and taking months to decide. Benoit recently signed a $25,000 job that he reviewed in June.

He has promoted the company’s maintenance work in its client newsletter, but even loyal clients are using low-cost handymen or, for windows and HVAC, working with specialty contractors. They use Benoit & Czarnecki for the more complicated jobs.

Benoit is also struggling with regulation. The remodeler educates consumers about a 2008 Pennsylvania law that requires contractors to register with the attorney general, but many homeowners still hire unregistered crews. He is also concerned about the cost of meeting the EPA’s new lead regulations.

—Nina Patel, senior editor, REMODELING.