Thursday, December 29, 2011 at 4:33 PM
Residential construction took a big hit when the mortgage crisis put millions of homes into foreclosure and practically shut down mortgage lending to anyone but those with sterling credit and plenty of money to put down. Analysts predict it'll be a long and gradual recovery for the home building industry. But one segment is looking brighter than most - small-scale home improvements. As part of our series "It was a good year for...," ideastream's Bill Rice spotlights one local contractor who's not complaining about 2011.
Dan Lenahan of Lakewood has been doing home improvement and remodeling jobs for more than 3 decades, staying busy year round most years. Then came the 2008 recession, and things got scary.
“In my whole experience in working, I’ve never seen it quite that bad,” says Lenahan. “The summer was very quiet. You could drive down the street in mid July and you couldn’t hear a hammer. You wouldn’t see anyone working on homes.”
2009? Same story …only now Lenahan had a lot more competion for what work there was.
“When people get laid off and they’re blue collar workers, they pick up a hammer or they pick up a paintbrush because it’s the first thing they think of. We had a lot of competition from the sidelines that we usually didn’t have. People were getting six and seven estimates on things. And you’d just walk in and you’d know you had to cut your prices to the bone so there wasn’t much profit margin.”
Things began to turn around in 2010, and this past year, he says his bottom line has really improved. There’s evidence this Lakewood contractor is not alone. Bernie Markstein is U.S. Chief Economist with Reed Construction Data, an industry information and consulting firm.
“There has been a general movement upward in the remodeling market.”
Markstein uses U.S. Census figures to track a wide range of construction activities, and he says while construction of new homes and major rennovations remain sluggish, spending on small-scale remodeling and home improvement is up about 2.5 percent this year over last year. And recent month-to-month figures also are positive.
“There’s been a trend which picks up a good part of the third quarter. So you’re getting two good data points for improvement in that market this year.”
The National Association of Homebuilders says its surveys of members, reflect a similar upward trend for home improvement projects.
Dan Lenahan has a theory about why this is happening…"recession fatigue.” Some customers, having survived the downturn, are just ready to move ahead on projects they had put off.
“It was almost like people said “You know, I’ve had enough, I have to fix this.”
And there’s one other factor Lenahan says that keeps him going through rough periods: He’s an avid barbershop singer. He sings in the quartet, Fermatta Town, and is involved with several other groups. He says the connections he makes through singing account for as much as a quarter of his business. And the music can’t help but bring a smile.
Economy, Housing/Real Estate, Regional Economy/Business - Analysis and Trends
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