Remodeling companies granting discounts, doing smaller jobs

Homeowners and contractors alike are reporting that remodeling companies are more willing to grant discounts and take on smaller projects at a time when business has slowed, building materials are less expensive, and homeowners are having trouble obtaining financing. Because most remodeling is done soon after a buyer purchases a home, the decline in home sales has been noticeable across the industry: the most recent data shows that only $118.2 billion was spent on home improvements in the year ending first-quarter 2009, down from $146 billion the year before. The downturn has also caused new home builders to try their hands at remodeling work, and the competition is driving down prices, too, though some traditional remodelers say that’s bad for the industry. Inexperienced builders, they say, often underestimate costs, and later find themselves cutting corners or unable to finish the job on budget. Meanwhile, those who refuse to bid lower than they can afford are losing out on projects. [WSJ]