Second Quarter Prices Released

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New material costs have been posted. They are ready to download to your estimating software.

Drywall costs are on the rise – plywood costs increasing earlier than usual

  • Drywall costs increased 15% to 25% after staying flat for many quarters.
  • Plywood costs up 15% to 25% across the country.
  • Dimensional lumber costs hold steady or fluctuate by less than 5%.
  • Roofing costs decrease up to 10% in most areas.
  • Insulation costs stay mainly unchanged with decreases of 5% in a few areas.


Here are some relevant articles from this quarter:

BuildFax Remodeling Index: Activity climbs 13 percent in January

HousingZone Staff March 2012

Nearly 3 million residential remodeling construction permits were filed in January, an 11 percent increase from the same time last year.

Residential remodels authorized by building permits in the United States in January were at a seasonally adjusted annual rate of 2,998,000, according to the latest release of the BuildFax Remodeling Index (BFRI). This is 13 percent abovethe revised December rate of 2,653,000 and is 11 percent above the January 2011 estimate of 2,705,000.

Seasonally adjusted annual rates of remodeling across the country in January 2012 are estimated as follows: Northeast, 430,000 (down 7 percent from December and up 12 percent from January 2011); South, 1,122,000 (up 17 percent fromDecember and up 6 percent from January 2011); Midwest, 595,000 (up 9 percent from December and up 14 percent from January 2011); West, 852,000 (up 10 percent from December and up 14 percent from January 2011).

“Residential remodeling this winter is as strong as it has been in more than five years. We expect residential remodeling to continue to grow throughout 2012,” said Joe Emison, vice president of research and development at BuildFax.

The BFRI is based on construction permits for residential remodeling projects filed with local building departments across the country. The index estimates the number of properties permitted. The national and regional indexes are basedupon a subset of representative building departments in the U.S. and population estimates from the U.S. Census. The BFRI is seasonally adjusted using the X12 procedure.


Residential Remodeling Index: Remodeling Hit Bottom in 2011

Sal Alfano
Remodeling magazine February 2012

The January 2012 Residential Remodeling Index (RRI) shows that overall remodeling activity declined 4% in 2011 compared with 2010. The revised data series, which is completely refreshed each quarter, reveals a slightly lowerthan anticipated bottom in the fourth quarter of 2011. This “second bottom” registered a total decline of just under 21% from the 2007 peak.

Taking into account recent improvement in the US economy and housing, the new forecast calls for 3% growth in remodeling activity across the US in 2012. Compared with 2011, this translates into the addition of 120,000 remodeling andreplacement projects nationally representing an estimated increase in remodeling expenditures of $2.6 billion. Although growth forecast to be just 0.3% in the first quarter, overall activity is expected to increase steadily through theremainder of the year.

Despite the modest growth rate forecast in the national averages, a much stronger increase in activity is expected in many recovering markets. In fact, of the 366 metropolitan statistical areas (MSAs) covered by the RRI, 304 are forecastto grow an average of 3.6%; just 22 markets are expected to decline.


City Watch – A closer look at the 20 best-performing markets on our Top 100 list

Remodeling staff
Remodeling magazine January 2012

Top Performers

These cities are characterized by steady housing prices and building permits. Remodelers in these cities are enjoying the most consistent workloads and backlogs.

Austin deserves its spot in the top 10, at least according to Doug Marsh, president of Sky-West Builders, who says that though there’s plenty of remodeling work going on, the key is who you know. “Except for the typical high-end[projects], it’s very cutthroat,” Marsh says, adding that it’s definitely a buyer’s market. “In Austin there are high-dollar ZIP codes where there’s a ton of work, including new construction,” he adds. “If you can get into theseneighborhoods, the money is there,” with remodeling projects in the $300,000 to $400,000 range. One thing that’s especially prevalent in Austin is that people truly love their neighborhoods. “They don’t want to move, so that really pumpsthe remodeling market,” Marsh says. “There’s a lot of stuff going on, and the remodeling permits are up.”

If there’s a rough patch in the remodeling industry, it hasn’t affected Russell Remodeling, in Dallas. Owner Tom Russell says he does pretty big projects and hasn’t really felt a downturn since he’s been in business. With a couple of bathremodels starting in January that range between $75,000 and $100,000 each and another $80,000 project at the ready, Russell is staying busy fielding calls. While his subs haven’t been as busy as they used to be, Russell has plenty of workfor them. “When I’m busy, they’re busy … and they’re plenty busy,” he says.


And he’s not alone, he points out: several friends in the remodeling world are also staying busy. “The people doing quality work are the ones who still have work,” Russell points out. And, he adds, if anything, the downturn could be usefulin thinning the herd in the Dallas/Fort Worth Metroplex.

Houston is at the top of the list, again, thanks to the foresight of the city’s leaders from almost three decades ago. When the oil boom went bust in the early 1980s, like Scarlet O’Hara declaring she would never go hungry again, the cityvowed to never again be dependent on just one industry. Thus started the influx of every sector from high-tech to aerospace. And Leslie King, an “old Houstonian” and the owner of Greymark Construction, couldn’t be happier, as 2011 isturning out to be her best year ever. Granted, the typical price for a project has dropped from the $150,000 to $200,000 range to around $75,000, but King says she’s working harder than ever on “a ton of kitchens and bathrooms” rather thanwhole-house remodels. In 2010, Greymark did a total of 27 projects; the company had already reached that number by last April, and 2012 is poised to be even better. “I’ve never been booked out for six or eight months in advance,” she says.”The first quarter [of 2012] is really good, and we’re already working on the second quarter.”

In Kansas City, daily papers are reporting upbeat stories about future job growth and city development good news for remodelers who have weathered tough times. “Three years ago things started going south. Two years ago was bad. Last yearwas bad. Millwork and cabinet shops dropped like flies,” says Norburg Construction owner Dan Norburg. But, he says, “a switch flipped” in September 2010, and “people are just tired of sitting on the fence.”

Kansas City never had the ups and downs of the coasts, and its medical industry continues to grow. In 2011, owner Jigger James’ company, Repairs Unlimited, saw “good, healthy growth”: his disaster restoration segment was up 45% from 2010and he saw nearly 15% growth in his remodeling segment. While there’s still plenty of competition, many “newer” remodelers  new-home builders who entered during their own downslide or newcomers cashing in during the boom  have gone out ofbusiness. Those left standing are solid, forward-thinking companies such as Country Club Builders, where owner Steve Atkins has taken on universal design and hopes to double his workforce in 2012.

For Oklahoma City, the oil and gas industries provide a stable economic base. “As long as gas prices are good, these [industries] are hiring and their employees have money to spend and improve their properties,” says Bryan Lee, owner ofGilcraft Construction, in Yukon. His projects include additions and whole-house remodels, and, he says, people are buying and renovating houses in the city’s desirable older neighborhoods.

Mike Casey, president of Gibraltar Construction, in Oklahoma City, attributes his company’s 8% growth over last year to the firm’s longevity  in business 20 years  and advertising to reach a broader customer base. Three years ago, about70% of his work was for upper middle-class homeowners in the Edmond area. Now his work is more widespread, with more middle-class clients who are upgrading baths and kitchens but are staying within the room’s existing footprint. “It’s adesire rather than a need,” Casey says. He has four employees, but with increased jobs in 2011 which he expects will continue through 2012  he plans to add sales and management staff.

Pencil Sharpeners

Remodelers in these cities report refining their budgets, running lean, and doing a stable amount of work but with fewer people or within a tight market.

People in the The City of Brotherly Love have to count themselves lucky when they compare housing costs here to those in New York City an hour and a half up the road via the New Jersey Turnpike. It’s less expensive to live in Philadelphia,where employment is powered by government, health services, and education but is simultaneously hampered by a cash-strapped city and its struggling school district. Local remodelers are starting to see some rebound even with unemployment at 10.9% in September 2011  two points above the national average. “I can tell you that 2011 is definitely better than last year, by a lot,” says Bob DuBree, who expected sales at his company, Creative Contracting, in the Bucks Countysuburb of North Wales, to be up about 25% over 2010. Bathrooms more in 2011 than in the previous five years combined  helped lift Creative Contracting’s numbers. For some companies, a relatively healthy commercial construction market hashelped make up for slack demand in residential renovation caused by slow housing sales and scarce credit. “Our commercial business has definitely increased in the last six months,” says Mark Pennington, secretary/treasurer of Gardner/Fox,one of the largest design/build companies in the area, located in the upscale Main Line suburb of Bryn Mawr. Gardner/Fox has recently hired back some laid-off employees, but Pennington says that he’s not sure if the uptick in whichopportunities became projects is about the company “being in the right place at the right time [or is] truly a shift in the market.” Residential customers are “still looking for what they’ve always looked for”: that would be a family roomconnected to the kitchen, and a remodeled kitchen or a master suite renovation.

Tulsa, was once the “Oil Capital of the World.” Petroleum still plays a big part in area employment. But as Oklahoma’s second largest city and the 46th largest city in the U.S., Tulsa remade itself as an aviation and aerospace center,with, today, more than 300 aviation-related companies in the area  including Boeing and American Airlines  annually generating $3.3 billion in commercial activity. This is a region with unemployment at a much lower level  6.4% in September compared with more than 9% nationally. But at the moment, the largest of those aviation employers  the American Airlines maintenance facility at the Tulsa International Airport, with 7,000 employees  may be looking to sell or relocate,which has given area business owners a case of “lockjaw,” reports Greg Wolter, owner of Community Builders, a home improvement company that expects a record sales year for 2011, due to, among other things, its own aggressive marketing. Innearby Bixby, Okla., Scott Shepperd, owner of S.A. Shepperd, specializing in kitchens and baths, calls Tulsa a “finicky” market for remodeling, where homeowners are more conservative in their spending than they were a few years back.”There seems to be money that wants to be spent,” he says, “but nobody wants to spend it.”

With its strong aerospace industry (employing 82,000 people at roughly 650 companies), and robust information/communications businesses such as Google, Microsoft, and Amazon, Seattle is a white-collar town with a median household income $60,843 in 2009  substantially higher than the national average of $50,221 (from the 2010 U.S. Census). Hanley Wood Market Intelligence projects a 4% increase in remodeling activity in the Seattle market, welcomed by local remodelers whohave seen the same tepid appetite for renovation experienced in other parts of the country. “It’s nothing like it was five years ago, when you were literally turning down work,” says Joe McKinstry, owner of Joseph McKinstry Construction, aremodeling and custom-home builder in Seattle that had 18 employees during the housing boom and has exactly the same number today, though it is doing jobs that are smaller. In the days of rapidly rising housing prices, the owner of an$800,000 house would spend $600,000 remodeling it. “That’s not the market anymore,” McKinstry says. His company builds lots of kitchens, baths, and decks. Cathy Gaspar, co-owner of Gaspar’s Construction, a Seattle remodeling company, saysthat her company’s clientele  who used to have few qualms about spending over their budget  now “want to maintain a budget.” Green remodeling has many fans in the Pacific Northwest. One Gaspar’s project two years ago involved reusing orrecycling just about everything that could be salvaged.

Home prices in the Gateway City went down during nine of the first 10 months of 2011, due to an abundance of foreclosed properties. But the market for home renovation in St. Louis, a place once known primarily for agricultural products andbeer, is slowly looking up. Manufacturing, health care, education, and hospitality  major sources of employment  all added jobs here last year. For the last three or four years, many remodelers here have considered themselves fortunate tohave survived, even if they don’t do the kind of sales they once did. “There are a lot of one- or two- or four-man companies that used to have 10 or 15 employees,” says Scott Mosby, owner of Mosby Building Arts, one of the largestremodeling companies in the region. “But the ones that should be around are still around.” Mosby and others expect to see more business just from pent-up demand. Gary Callier, president of Callier & Thompson, which operates a large kitchenand bath showroom in St. Louis, says that his company is “still down 30% from where we were four years ago.” But Callier says he is budgeting for $8.4 million in sales in 2012, which is what the company expected to see in 2011. Like manyremodelers, he says, “I’ve thrown away my crystal ball.” This market, with many older homes, also has an older demographic. That’s reflected in the many requests that Callier & Thompson gets for walk-in tubs, low-threshold showers, andhigher toilets. Mosby credits his success to the company’s decision to create a “Solutions” division for maintenance and repair, to augment design/build sales. In 2009 and 2010, Solutions generated 60% of sales, but in 2011, design/buildonce more generated 60% of Mosby Buildings Arts’ sales.

New Normal

Residents are ready to spend, but are doing so with caution or are breaking projects into phases.

Before 2008, banks were the largest employers in Charlotte, which was the second largest banking center in the U.S. (New York City ranks No.1). Jamie Oliver, president of Southend Home Improvement, says that almost half the company’s leadscome from bank employees, but many are holding off due to uncertainty about jobs and bonuses. However, due to its marketing efforts, Southend’s sales volume increased by 25% in 2011 and roofing sales were up 80% over the previous year. Itis also pursuing multifamily projects, working with property management companies and condo associations to install new windows or siding and to repaint exteriors. For residential projects, most clients aren’t financing but are using moneythey have saved. Jobs include kitchens, baths, and outdoor spaces, with clients getting five to seven bids (versus two to three before the recession). Oliver says that homeowners are also interested in boosting energy efficiency to lowertheir utility bills, with federal tax credits a bonus rather than a motivator to do the work. In April, Southend opened a satellite office in South Carolina to better serve the storm-driven roofing needs of this more rural market.

Though Duane Johns, co-owner of Advanced Renovations, also noticed cautiousness among banking employees, he is encouraged by new employers such as Electrolux and Charlotte’s role as an energy hub, drawing alternative-energy companies intothe city. The remodeler says that after shrinking in 2008 and 2009, project size increased in 2011, and the last six months seem busier. He has noticed more remodeling activity in neighborhoods closer to the city and has even seen somenew-home construction activity. In 2008 and 2009, customers were only looking at cost. In 2011, more sought value and professionalism  possibly, Johns speculates, as a reaction to bad experiences with low bidders. Homeowners are notsplurging on large additions or extravagant details, instead opting for functional updates to increase the value of their homes.

From Forbes to Bloomberg Businessweek,Columbus raked in accolades throughout 2011, including being listed as one of the top 20 strongest economies coming out of recession (Bloomberg). Remodelers seem to agree with the sentiment ofrecovery, saying that Ohio homeowners are beginning to dust off the cobwebs of a slow economy. “It’s is a solid town,” says Gary Demos, president of Dave Fox Remodeling, in Columbus. “There’s money here, there’s education, industry.” Demossays that perceptions of Columbus’ strength and stability have even made an impression on his peers. “We hosted 11 companies for a peer group meeting last September,” he says, “and heard a lot of really positive comments about the city. Interms of sports, the downtown area, campus, and the Arena District really cleaning up the city and its image, people were saying what a great city Columbus is.”

After being entrenched in a wait-and-see attitude for a long time, Demos says that’s now shaking loose and homeowners are beginning to act. But, he notes, financing remains a concern for some. And, of those who have funds available forremodeling, many are focusing more on who they work with than on what they’re paying for it, compared to years past. “Before, price was a huge issue,” he says. “Everyone that had a project was looking for who could do it mostcompetitively. Now they want to know who they can trust to do it well and to maximize their value.”

Design and right-sizing have also come to the forefront. Todd Schmidt, president of Renovations Unlimited, in Grove City, Ohio, says, “Our clients are spending more time on evaluating how much space they really need to add on and thepotential of phasing projects to get the most from their budget. In the past, they may have renovated the whole house at once; now they’re doing the second floor first, and then the first floor. Or, if they had been planning on anaddition, they’re looking at something like a 12-by-8-foot addition rather than a 20-by-20-foot project.”

Schmidt adds that he hopes the comfort level homeowners have adopted will snowball into more growth for the industry through the next few years. “We’ve heard a couple of different scenarios: that we’re in year four of a 10-year recessioncycle, contrasted with the prospect that remodeling here could be back to 2008 levels by 2013. We try to look at the positive side and keep moving forward.”

Denver proper  not including the mountain towns and second-home markets  has seen a winnowing process among remodelers, contractors, and architects. “But in the past year we’ve seen an increase in remodeling activity,” says Michael Griggswhose Certified Restoration Consulting Group works with remodelers and restoration companies.

Cress Carter, owner of Old Greenwich Builders, a high-end general contracting company, says that his clients and vendors who have been sitting on the sidelines “no longer want to wait to do their project.” Carter’s business  mostly customhome building  has hardly seen a dip and doubled its volume in 2011. This may be an anomaly, but Dave Gartland, a partner at BOA Construction, says, “We’ve built more custom houses  three in 2011  in a short period of time than we have inthe previous 20 years.” BOA’s remodeling work “remains clustered at each end of the spectrum: small interior remodels  as much as they can for as little as they can spend  and some big whole-house jobs.” But, Gartland says, BOA is notseeing a lot of “bread-and-butter additions with master suites.” Though the housing market is depressed, and overbuilding has left some developments half empty, Carter says that his high-end clientele are building knowing they’reunderwater on day one post-project: “People are going for long-term investments and plan to live in their homes for the next 20 to 30 years.”

Paul McClorey, president of Paulson’s Construction, in Howell, Mich., says that Detroit’s decline seems to have slowed, and that although “it’s not a bright picture, it’s not as negative as it once was.”. His business grew from 2009 to2010, and 2012 looks promising for continued growth. He predicts growth in the area north and west of Detroit. “Oakland County will be the area of most immediate growth as the market returns,” he says. However, he adds, potential clients”have the desire to do things, but not the desire to make it happen,” and they have unrealistic expectations about project cost. Some are trying to find ways to complete a project by asking about purchasing their own products or doing someof the work themselves. Patricia Harroun, president at Cardea Construction, in Ann Arbor, Mich., says that 2011 has been the toughest year in her 26 years in business. “We’re so small,” she says, “we are directly tied to the economy.”Harroun says that contractors are now moving to remodeling  as are as former car industry employees. The competition has become “quite cutthroat,” with small contractors doing work “for the price of materials.” Some homeowners haveunrealistic expectations about projects, and they usually choose to drop a project after some initial research. However, others have been saving money and are ready to update their homes. They seem more secure about their jobs than a fewyears ago and “are buying good-quality products and splurging on finishes,” Harroun says. “There is less buyer’s remorse.”

The Milwaukee-area economy has benefitted from relatively low unemployment (8.5% as of press time) that’s expected to decline into 2012, as well as increases in median income. Home­owners are spending carefully, but they’re spending. “Weall went through the ‘What happened to the economy?’ phase, and it was negative for so many years,” Kevin Anundson, president of The OAR Group, in Elm Grove, Wis., says. “Now we all know that we’re working harder for the same or less money… When something happens long enough, it becomes normal. This is our new normal.” For many Milwaukee-area remodelers, the new normal is defined by smaller projects or phasing of large projects that, three or so years ago, may have beendone all at once. “In 2007, customers called us to remodel their whole kitchen because the dishwasher had broken,” says David Pekel, president of Pekel Construction & Remodeling, in Wauwatosa, Wis. “Today when the dishwasher breaks, theycall the repairman.” Pekel adds, “Clients are coming to me saying, ‘We have five projects to do in the next five years. Can you help us understand if there’s a rhythm to how they should be done?’ They want to invest as much as they cancomfortably in each phase of the project. It’s still the same pizza, just one slice at a time.”

Pekel adds that many homeowners are focusing on home improvement rather than on remodeling: upgrading mechanical systems or repairing and replacing exterior products. “To that end, the economy is influencing the degree of home improvementthat’s going on.” Anundson and Pekel both note that financing has had a major effect on the size and scope of Milwaukee-area remodels. “There are challenges in paying for projects  even some homeowners who appear to be well-off can’t getfinancing,” Anundson says. Pekel agrees: “People are using more of their own money, and that’s one of the reasons these projects have taken on a more affordable or realistic budget character.” Anundson believes many homeowners are “sick ofwaiting” for the economy to improve. “This won’t be our ‘normal’ forever,” he says. “There are better days coming.”

Smaller projects, tighter budgets, say remodelers in Minneapolis. “It’s not quite as fun as it used to be,” according to Ali Awad, a principal in the design/build firm Awad + Koontz. “And it’s a lot more competitive.” Veteran remodeler EdRosko­winski, with Vujovich Design Build, agrees. His company did 60 projects in 2011  20 more than the previous year  but they were smaller in volume.

“Our larger projects are typically driven by new purchases,” Roskowinski says, but “since the real estate market has been down, we’ve seen fewer large projects.” Despite the difficulties, remodeling projects have been steady, especiallythrough the summer and especially for subcontractors, says Dan Hanson, owner of Hanson Building & Remodeling, who has been a sole proprietor for the past three years. The weather plays a big role in Minnesotans’ decision to remodel, andfor roofing companies, a year of snow, ice, hail, tornadoes, and heavy rains has been a boon, says Dave Karel, president of Garlock-French Roofing. But because a large number of roofs in this market have already been done, Karel says heisn’t “overly confident” about the future., and will remain conservative in his budget estimates for the next few years.

Tortoise & Hare

These cities have made a slow and steady climb in the Top 100 Markets list over the years.

Residential Remodeling Index (RRI) research places Boston sixth on the list of largest markets based on remodeling activity per household. Remodelers there agree that repeat customers have bolstered their businesses in the last year. Withsome houses more than 150 years old, little room for new construction, and the seventh most dense population in the country (according to 2010 census data), Boston is a consistently popular remodeling market. The city has claimed the lucky13th spot on the Top 100 Markets list for the second year in a row, steadied by job security and strength in service, technology, education, and medical industries. “I don’t think we’ve seen the erratic nature the rest of the country has,”says REMODELING columnist Greg Antonioli, president of Out of the Woods Construction, in Arlington, Mass. Antonioli suggests that residents of Boston’s higher-end neighborhoods still remain financially conservative, but that “posterityfatigue” is setting in. “They were ready to pull the trigger on a project in fall of 2008, and they’ve been sitting on it for three years,” he says. “Now they’re tired of waiting and want to move forward, though they are interested inseeing more options and cost breakdowns, which we certainly don’t mind.” Antonioli and Cory Desjardin, who is president at New England Design & Construction, in Boston, both note that real estate turnover has brought them new business overthe past year. “We’ve done two projects and are looking at a third where the clients have purchased a property with the intent to remodel it before they move in,” Desjardin says. “Realtor friends have told me that home values haven’tfluctuated too much  they’re not going up, but they’re also not going down. Leads I’ve gotten through Realtors’ offices are for homeowners who are buying now and remodeling right away so that in five years they can turn it around again.”Other Boston homeowners are moving forward with needs-related remodels, such as growing families or in-laws moving in. They’re remodeling rather than selling, and David West, president of Meadowview Construction, in Georgetown, Mass., saysthat they’re looking to work with someone they can trust. “It used to be that having a large proportion of repeat and referral work wasn’t a great idea  you need to be bringing in new customers as well. But referrals and repeat work havereally kept us afloat. Most of these people have busy careers, they work a lot, and they don’t want to have to be in their house to manage a project. They want to work with someone they’ve worked with before, or who comes as arecommendation from a trusted friend.”

ProBuild, a large national building products supplier closed its two Chicago locations at the end of 2011. Steve Taylor, co-owner of Synergy Builders, in West Chicago, says that besides ProBuild, several large millwork companies haveclosed their doors. In turn, his small millwork supplier has picked up the slack and is doing well. He says that in this tough market, when it comes to remodelers and vendors, those that remain are offering strong customer service and aredoing well. “We demand great subcontractors and vendors  it’s all about service,” Taylor says. Synergy Builders recently dropped a large cabinet company because the remodeler was not receiving the type of customer service required torespond to its clients. Taylor says that a representative from his new cabinet company sent a vendor to the jobsite to help him with a design. His plumbing vendor is replacing damaged products without any hassle and recently took some ofthe Synergy Builders crew on a golf outing. Taylor says that his homeowners want to know that he is bringing reliable companies into their homes. Synergy Builders has an eight-week backlog and has and expects to increase sales in 2012.”Vendors see how well we are doing, and they help us any way they can,” Taylor says. “They want to keep us as customers.”

LaPelusa Home Improvement has been in business in Niles, Ill., for 46 years and is seeing local companies closing their doors, says president Tony LaPelusa. Three large local suppliers have gone out of business, and a Milgard window anddoor manufacturing facility has closed. However, LaPelusa says, the vendors that he works with are very attentive. If he has an issue, not only does he get a visit from a supplier rep, but sometimes from a manufacturer rep as well. “Theyare very helpful,” the remodeler says. As far as product orders go, LaPelusa says he hasn’t noticed any issues in fact, he adds, if anything, order times have gotten shorter. His company rebounded well from a rough 2009 with a good 2010and 2011, which he describes as “slow, tentative growth,” and he says that help-wanted signs in store windows and full shopping-mall parking lots are both signs that people are spending money. LaPelusa Home Improvement has work lined upthrough spring 2012 and has several projects currently in different stages from design to bidding that the owner expects will contribute to the company’s 2012 volume.

According to website, while Oregon’s rural areas continue to struggle with especially high unemployment, metro Portland is now recovering faster than many other U.S. metro economies. Since 2009, metro Portland has added 4%to its gross metropolitan product, compared with the U.S. average of 3%, and employment per capita increased by 2%, versus the national metro average of 1%.

But as in other markets, Portland remodelers have seen fewer and smaller jobs the past few years. For many, work may be steady, but how much available work there is depends on the neighborhood and its proximity to those involved inhigh-tech industries. (Intel employs thousands of workers and pumps billions of dollars into the state’s economy.) Overall, the housing market remains depressed, and Mitch Speck, owner of Specktacular Home Remodeling, believes it has yetto bottom out. “There are still a lot of foreclosures,” he points out. “As long as those foreclosures continue, we’ll see prices decline.” While Portland remodelers agree that there is a sense of pent-up demand, this housing issue ismaking it difficult for midrange clients to get financing. But high-end jobs, too, have slowed down. Lane Cooper, owner of Cooper DesignBuilders, in Portland, says that he has had only a few $200,000-to-$700,000 jobs this past year, butthat $25,000-to-$50,000 projects are picking up because “people can handle projects of that size without getting financing.” The challenges of the changing market have resulted in changes to remodelers’ business practices. Speck laid offemployees, moved his office back to his home, and took on production duties. He also has gone back to doing light commercial work, where he has seen an uptick. Wade Freitag, owner of Craftsman Design and Renovation, moved hisoffice/showroom to the second floor of Rejuvenation Lighting & House Parts, which was recently purchased by Williams-Sonoma. He has found that this increased foot traffic offers his company a built-in qualifier. Despite the ongoingchallenges, both Freitag and Speck remain optimistic for 2012.

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