Tables Turned: Contractors Now at Homeowners' Mercy

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Carpenter Matt Hennebry works on a new home in Yorkville, Ill.

Laying hardwood floors is no duck walk, so Doug Ingalls recently posted an ad on Craigslist looking for a contractor to handle a 1,000-sq.-ft. job in his suburban Syracuse, N.Y., home. After weeding out fumble-fingered impostors, Ingalls found a professional who spent a weekend scoping the job, laying the wood, nailing down the loose ends and sweeping up. All for $720.

"I was shocked, absolutely shocked," says Ingalls, who owns a company that designs and sells novelty jewelry. "I was expecting to spend $1,000 or more. And he did a great job on top of it all. I still cannot believe it."

Upbeat, heartfelt tales about experiences with electricians, carpenters and plumbers are as rare as good news about the economy or Jon and Kate Gosselin. Shoddy workmanship, cost overruns, rampant dishonesty — anyone who has been through a kitchen renovation can tell you how truly wretched life can be. And that was if you could find a skilled craftsman to handle a project. In flusher times, it was darn near impossible to hire anyone but a fly-by-nighter to fix a faucet, let alone build a master suite, for under six figures.

These days, though, with hungry tradesmen chasing fewer homeowner dollars, consumers who may not know the difference between a nail and a hammer have the upper hand. If you've got the money, someone who knows his way around a band saw has got the time, and often at a very good price. And chances are, depending on where you live — best spots: the West Coast and the Northeast — he'll be right over.

Consider, for example, the homeowners' association in a gated Southern California community that voted last year to build a new community center. "Thanks to the economy, our bill will be about 30% less than we'd estimated, and we've had tons of companies begging to bid on our job," says homeowner Marcia McNulty.

More and more contractors are offering deep discounts, especially when three or four competitors show up to bid on a project, no matter how small. "It's pretty tough right now," says Paul Witcovich, an independent contractor in Lafayette, Colo. "I know that I'm charging less than I did in 1978, which is about $30 per hour or less."

This year, U.S. homeowner spending on remodeling projects will continue to drop through the autumn, according to a forecast by the Joint Center for Housing Studies at Harvard University. The center estimates that owner-occupied households spent $122.6 billion on remodeling and repairs last year, compared with $139.1 billion in 2007. And the scope of many projects is small compared to what it was, say, three years ago, when newly built homes, swimming pools and huge additions were more the order of the day than the current crop of bathroom renovations and refaced cabinets.

Bill Gage, who owns a corporate staffing firm in West Reading, Pa., and takes midday jogs several times a week to break up his long, stressful office hours, decided this spring to have a shower installed in his company's headquarters. Gage did not react well to the first contractor's estimate of $14,000: "I say, 'Are you nuts? I'm not paying your country-club dues, pal.' He drops the bid to $4,400." But Gage got another estimate, from his receptionist's husband, for $1,100. "He wins, and he does a super job, top notch. The first contractor comes back to see how it went. He doesn't say much, other than that a couple of pipes are sticking out. At that point, I'm saying: 'Who cares? Look at the deal I got!' "

Next up for Ingalls' house in upstate New York: more floor work in the foyer, as well as granite-topped counters in the kitchen. That means another trip back to Craigslist. "There's no reason to think that I won't get the same results I did the first time," he says. "Approaching a project in this way and in this economy definitely tips the scales in a consumer's favor. And I'm more than happy to take advantage of it."

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