Survey’s in. Home starts are down and new home permits are at an ALL TIME LOW.
Many Home Builders are going to become Remodeling Contractors to supplement the workload. This will make Contractor selection for residential remodels a bit more challenging.
Although I have worked with and around many Home Builders turned Remodelers who were very qualified, I have also worked with and around many who were clueless when it came to things like how to blend in old siding, stucco, drywall, with new without obvious defects. There is a huge difference in starting from a clean slate and retrofitting new to old seamlessly. Continue reading Housing Bust may prove to be a breeding ground for Unqualified Remodelers.
Category Archives: Construction in General
Construction Costs On the Rise.
For those of you who have been holding off on your prospective remodels waiting for Contractor’s pricing to bottom out, you may have already missed the boat.
Although Contractor’s and Subs LABOR pricing has indeed hit rock bottom and will likely remain there for awhile, the rising price of construction materials across the board will at least offset the discounted labor and will continue to rise through the summer months. Rising fuel costs and the upcoming product demand for rebuilding Japan after the horrible earthquake/tsunami disaster will drive prices even higher. Continue reading Construction Costs On the Rise.
Nice Surprise!
Sometimes you get lucky and stumble on some nice surprises during the course of a remodel. This particular kitchen remodel presented an unexpected treat. When we exposed the existing ceiling framing, we found that the ceiling had been dropped to 8 feet for some unknown reason and, for a very minimal expense, we were able to remove the dropped ceiling which left the client with a 9 foot ceiling height which, in my opinion, was one of the best enhancements of the remodel. Continue reading Nice Surprise!
Preparing for Your Remodel
I always expend a little extra dialog with my prospective remodel clients to try to get a good feel for whether they are truly prepared for the endeavor which they are about to undertake. Over the years I’ve seen some pretty dramatic reactions by people who thought they were ready and when the work began they were completely overwhelmed and unprepared.
Sometimes I think people expect us to come to their homes and very quietly wave a magic wand and presto, the job is complete. Continue reading Preparing for Your Remodel
Cost Plus Contract vs. Fixed Price Contracts. Weigh In.
I was just reading some comments from a group of Construction Business Owners on the topic of Time & Materials, (T&M Contracts) vs. the more common Fixed Cost Construction Contracts.
I’ll be very interested in hearing your comments on the concept both from the Contractor’s and the Consumer’s perspective.
For those of you who aren’t clear on the how this works, here’s a general description although there are some variations. Continue reading Cost Plus Contract vs. Fixed Price Contracts. Weigh In.
Housing Index Update
With recent news that the nation’s home values may very well continue to drop over the next several months, it’s no wonder most homeowners have concluded that they may as well get comfortable where they’re at least for the time being.
On the positive side, at least for some production home builders, some areas have actually seen prices increase on new homes. Existing homes however may continue to see a decline in value due to the continuing market deluge of foreclosures with no foreseeable end in sight.
“We should expect house prices to continue to fall, with nationwide prices dropping another 15 to 20 percent to complete the process of deflating the bubble,” wrote Dean Baker, co-director of the Center for Economic and Policy Research, in the New York Times.
“It’s pretty clear the housing market has already double dipped,” says David Blitzer of S&P.
Patrick Newport of IHS Global Insight observed that existing home prices in several metro markets had actually triple dipped during the recession.
It has to make you wonder why the policy makers didn’t shift their focus early on to making housing more affordable during the housing bubble rather than allow prices to inflate beyond the average home buyers means and the turn a blind eye to lenders who offer mortgages that were virtually unpayable to many buyers.
The benefits of making housing more affordable to the average buyer would have an enormous impact on our economy. Not burying homebuyers in debt beyond their means frees up much needed cash that could benefit the economy by being spent in various other sectors.
There’s no doubt that when the dust settles and the reality hits that “you might as well make the best of where you’re at for now”, that at least the remodeling industry is due to see an upswing.
New California Building Standards for 2011
Well 2011 is almost here. I hope everyone is ready for the new building codes which take effect on January 1st. The new codes include two brand new-to-California publications: the Green Building Standards Code (CALGreen), and the California Residential Code, which will require automatic fire sprinklers in all new single-family homes in California.
“This time around we are looking at adopting the 2010 California Building Code (CBC) which will be based on the 2009 IBC. A new code for us will be the California Residential Code (CRC) and that will be based on the 2009 IRC. The balance of the codes will be the 2010 CFC, CMC, CEC. The 2008 California Energy Standards are already in effect.”
Source- kpaa.com/news
There has been a lot of controversy over the new fire sprinkler requirement with opposition headed mostly by NAHB, The National Association of Home Builders, who argue that the sprinklers are not needed and will add significant cost to new projects. Some sources have calculated that the average cost per square foot will be in the neighborhood of $1.61. Others claim the cost will be much higher.
The bottom line is, if you would rather not have to deal with these requirements, your only alternative is to get your plans submitted for permits prior to Jan 1, 2011.
There are a lot of new energy codes to comply to as well with the Cal Green standards being implemented and some wonder how this will coincide with the current LEED standards.
Click Here to download the comprehensive overview of changes taking effect with CalGreen.
Is ROI the most important influencing factor for your prospective remodel?
If it is I’m afraid I have some bad news. According to the latest report published in the mainstream consumer media, CnnMoney.com, in it’s analysis of the 2010 Remodeling Cost vs. value survey.
“In general, anyone planning a home remodeling will pay a lot more for the job than they will get back in return when they sell. Only 60% of remodeling costs in 2010 would be recouped by homeowners, the report said.”
It seems that the payback on most remodeling projects will not yield the returns of years past.
So maybe it’s a good time to re-think the value of ROI in a broader perspective. The big picture might go beyond hoping the expense of the project can be recouped in the sale.
Consider, for example, the value of having the kitchen that is custom tailored and built to suit your specific needs. Or the master suite you’ve always dreamed of with the jacuzzi tub and dual shower heads. The advantages of a healthier indoor air and living quality for you and your family when investing in green products. The value of the relationships you’ve built over the years with your neighbors and the amenities you’ve grown accustomed to.
When considering the option of moving to a home “more suitable” to your needs, we need to factor in the expense of moving with real estate fees, actual moving expense, the unknowns of new neighborhoods, etc.
Another thing that should be taken into consideration is the fact that most people end up doing a substantial remodel on their new homes within 12 months of moving in.
So, do we go ahead and spend the money knowing the return might not be there? Spend the money on something that will produce a better return? Or do we opt instead for “greener pastures”?
Click Here for more on the survey.
Political Hypocrisy
Why is it that every time I hear a campaigning politician open his or her mouth they talk about “The most important thing we can do for this crippled economy is to create more jobs.” While often prioritizing the construction industry.
Yet every time I turn around they’re coming up with new regulations, certifications, and penalties which make it more difficult for us in the construction industry to survive.
In my City of Sacramento Ca., multiple government entities have teamed up and began visiting jobsites randomly pulled from permit applications and proceeding to hand out fines beyond the means of any small remodelers in my area. These entities include Cal Osha, Ca. State Contractors license board, EDD, and the labor board. All showing up in unison at sites with badges glaring.
They proceed to question workers and cross examine their employers. Following up, if deemed necessary, by an office visit to check records against the jobsite depositions.
A good friend of mine, who does primarily insurance repairs, was recently visited at his site and was fined $18,000 for violations like no wash station next to bathroom, ($850), a ladder not strapped to the building, not having a first aid kit on site, lacking the proper safety postings and safety meeting documentation, heat prevention documentation, and more. Note that having the time to provide and maintain all of this is practically a full time job for 1 person, (slight exaggeration). And the way we’re bidding these days to get work there is no room for this extra burden and if there were it would just be passed on to the consumer.
Although many would argue that these are all very valid and important issues, my problem is that these fines are not only excessive but more or less “one size fits all”. The same fines would be imposed on larger companies, who are more able to handle the load, as the smaller 1 and 2 man crews who will surely risk closing up shop as my friend very well may.
Even a small company like my own being closed down would mean less work for my hourly guys, my subs, and their employees.
Come on people. This type of activity always seems to increase when we have budget shortfalls and a desperate need for our politicians to find ways to create revenue so they can boast about how they saved the budget while throwing a blind eye to the cost.
What you should know about the Environmental Protection Agency’s new RRP Law and effects
Beginning April 22, 2010 the Environmental Protection Agency’s new RRP ruling will take effect which will have a significant impact on the residential remodeling industry. Any homes built prior to 1978 will be considered target housing as well as any other child occupied facilities and schools. Prices on larger jobs can be expected to increase as much as 10-15% although the impact on smaller jobs would be less drastic.
Homes targeted by this ruling would require very stringent practices involving the containment of lead based paint dust during demolition and construction in order to prevent, or minimize, further risk of lead poisoning.
Unfortunately very little has been done to inform the public even though this law was passed in April of 2008 and planned implementation was then set for April of this year. Considerable price increases could have been avoided if work was completed earlier on.
Contractors who will be working on these target dwellings are now required to get certification from the EPA which involves completing an 8 hour course on lead based paint containment ($200-$250) and submitting the required application to the EPA with a $300.00 processing fee. We will then be required to purchase tools and equipment needed for compliance with the regulation. The EPA originally estimated processing of this application to take no more than 90 days although the lack of public awareness has created a last minute frenzy to get certified which has the processing backlogged for up to 160 days. Fines for non compliant contractors and maintenance workers will be as much as $37,500.00 for each day a violation has occurred. After certification, contractors will be authorized, at the owners request, to perform limited lead testing to be done with EPA certified test kits. Any non certified employees are required to be trained on the job by the certified renovator. Documentation for employee training, lead testing, containment, and cleanup is required and should be kept on hand for three years after job completion.
What Homeowners need to know;
After the ruling takes effect, any contractor performing work on target housing which disturbs more than 6 square feet, (interior), or 20 square feet, (exterior), of lead based paint will be required to be certified.
No more than 60 days prior to the start of construction, your contractor is required to give you the EPA pamphlet “Renovate Right”, which contains information about the effects of lead poisoning in children and adults as well as a brief process overview for the containment of lead based paint dust.
Areas to be worked on are to be sealed and off limits to the homeowner and warning signs are to be posted around the entry to the contained area.
A thorough cleaning must be performed at the end of any work which disturbs lead based paint which requires passing a cleaning verification test.
For more information visit the EPA’s website at http://www.epa.gov/lead
Other related articles;
See a video on lead containment procedures http://bit.ly/a60JE7
Washington Post http://bit.ly/9zMmu7
More Info http://wondermakers.com/LinkClick.aspx?fileticket=-u44UnT3sDE%3D&tabid=71