A young lawyer friend of mine recently called me to ask what a whole-house remodel might cost these days in one of Washington’s up-and-coming neighborhoods.
Not being involved in the day to day of remodeling any longer, I passed the query along to 10 or so remodeler acquaintances in the area. Knowing the aversion that remodelers have to throwing out ballpark figures, particularly sight-unseen, I provided a general description of the property (a typical three-storey rowhouse, including basement apartment); and, knowing the aversion that remodelers have to tire-kickers, I further explained that my friend was looking at properties to buy and was trying to factor remodeling costs into the purchase price — a guesstimate within 25% would be more than adequate.
I got two responses, each of which declined to provide a figure, but in very different ways. One company owner said that in his experience, he had never gotten any business when responding to people who didn’t yet own the property. The owner of the other company explained that while he was reluctant to throw out a blind figure, he would be happy to meet my friend at the property and give him a more “informed opinion.”
Both companies had good reasons for the way they responded. Given its history with non-owners, the first company made a rational decision to not merely refuse to throw out a ballpark number but to not pursue the inquiry any further — that would only have compounded what had historically proven to be wasted time and effort. The second company had less to lose; it was already working on a project nearby, so offering to meet personally involved traveling only a short distance and spending an hour touring the house.
But I can’t help thinking that a by-the-numbers response no longer applies to a market where consumers are just beginning to think about spending again. Yes, homeowners are more price-conscious now than ever, but they are also looking for reasons to buy.
Homeowners feel no sense of urgency not because there is no remodeling need, but because the market is flooded with remodelers. No one is waiting to find a spot on the schedule, and no one knows if the market has hit bottom or not.
The New Consumer
So, if an urgent need to get on the schedule no longer applies, what is the “new consumer” looking for? That’s the topic of our cover feature, which begins on page 36. The answers are not as surprising or as unfamiliar as you might think.
Like my young lawyer friend, consumers once again understand something that the housing boom caused many of them (and us) to forget: It is possible to overspend.
That fear leads people to proceed more cautiously, more slowly, and on a smaller scale. It might mean phasing the work to take care of repairs and systems upgrades first, but it might also mean having to make tough choices in the more discretionary parts of the project.
That makes it more difficult for remodelers used to working with clients who once bought the best of everything, but it also makes a remodeler’s expertise more valuable. Those who present reasonable choices and informed guidance will win their clients’ confidence — and their commitment.
A healthy cynicism was justified a few years ago, when it offered protection against the lost opportunity cost of chasing after unqualified potential clients. But the market has changed.
Oscar Wilde wrote that a cynic is “a man who knows the price of everything and the value of nothing.” This used to be a remodeler’s chief complaint against price-conscious homeowners. Today, however, it might as easily describe a remodeler who is too focused on the cost of a lead.
A young lawyer looking to buy and renovate a downtown property is about as good as it gets. The cost of an initial encounter seems well worth the value — “potential” value though it may be — that such an encounter might bring.
—Sal Alfano, editor-in-chief, REMODELING.