Contractor Pricing During Pandemic

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DTalos
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Contractor Pricing During Pandemic

Post by DTalos » Sun Mar 22, 2020 4:33 am

Do you all expect contractor pricing to decline during this economic downturn?

Cactuscoug
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Re: Contractor Pricing During Pandemic

Post by Cactuscoug » Sun Mar 22, 2020 6:46 am

I don't know about all of us . . . but I do.

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Sandtrap
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Re: Contractor Pricing During Pandemic

Post by Sandtrap » Sun Mar 22, 2020 7:15 am

There are:

Licensed - Insured - Bonded - Legitimate
1.
General Contractors (whole project with trade specific subcontractors and employees)
a) General Building Contractors (residential or commercial)
b) General Engineering Contractors

2.
Sub Contractors (trade specific. IE: sitework/grading, framing, electrical, plumbing, HVAC)

3. One person "Contractors", marginally licensed or no license
(pickup truck and a large dog) :confused

4. Handyman, Maintenance (contractor), Repairs (contractor), Freelance Carpenters, "Jack of All Trades Master of None"
(van and a small dog) :confused

It depends on what specific trade and what category.
IE: HVAC and Electricians remain the same because what they do is unrelated to economic trend. You need heat. You need power.
IE: New Construction related contractors/builders are more correlated to the economy and local conditions.
IE: Remodeling contractors are more correlated to the economy.
IE: Commercial new build contractors, also correlated to the economy.
Etc
Etc

Also, regardless of the economic trends nationally or globally, there are local economic trends at work as well.
IE: A handyman in Scottsdale is going to stay busy because those in that area still will have adequate financials to pay for work to be done. However, he might face increased competiion from carpenters that have been laid off from Contracting companies.

j :happy
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HomeStretch
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Re: Contractor Pricing During Pandemic

Post by HomeStretch » Sun Mar 22, 2020 7:27 am

I have great contractors that I use on a regular basis. As long as we are employed, I wouldn’t pay them less than their regular rates. It will be easier to get on their schedule though!

WhyNotUs
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Re: Contractor Pricing During Pandemic

Post by WhyNotUs » Sun Mar 22, 2020 9:20 am

Where I live, the price of a new custom home dropped 20% in 2009-2010.

The lack of financing for new projects meant that the pipeline of new projects dried up. The trades and GCs who survived got better deals on materials and lowered their rates. I expect to see a drop in our market over the next year but probably not as much since there are fewer contractors. Not sure how materials will react, we will see.
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fishmonger
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Re: Contractor Pricing During Pandemic

Post by fishmonger » Sun Mar 22, 2020 9:59 am

WhyNotUs wrote:
Sun Mar 22, 2020 9:20 am
Where I live, the price of a new custom home dropped 20% in 2009-2010.

The lack of financing for new projects meant that the pipeline of new projects dried up. The trades and GCs who survived got better deals on materials and lowered their rates. I expect to see a drop in our market over the next year but probably not as much since there are fewer contractors. Not sure how materials will react, we will see.
I'm a CFO for a regional roofing contractor. Material prices are already coming down (in a lot of ways, for a lot of different reasons, they generally follow the petroleum market). The length of this crisis remains to be seen how bad it will be - many manufacturers are ceasing production and telling us they have plenty of supply in inventory to get us through but....

fishmonger
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Re: Contractor Pricing During Pandemic

Post by fishmonger » Sun Mar 22, 2020 10:02 am

HomeStretch wrote:
Sun Mar 22, 2020 7:27 am
I have great contractors that I use on a regular basis. As long as we are employed, I wouldn’t pay them less than their regular rates. It will be easier to get on their schedule though!
+1. We are scheduled to do a kitchen/bath remodel at the end of April. Both my wife and I have secure jobs that are pretty recession proof so we have no desire to postpone/cancel/haggle for better pricing. We live in a relatively rural college town of 25,000 so relationships are much more important to us than saving a few bucks

FoolStreet
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Re: Contractor Pricing During Pandemic

Post by FoolStreet » Sun Mar 22, 2020 10:11 am

DTalos wrote:
Sun Mar 22, 2020 4:33 am
Do you all expect contractor pricing to decline during this economic downturn?
Troubling times. Many areas are halting all construction to limit spread.

Also, if contractors have personal protective gear, many are considering donating to local hospitals. Hospital staff are simply not prepared for this outbreak.

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8foot7
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Re: Contractor Pricing During Pandemic

Post by 8foot7 » Sun Mar 22, 2020 10:26 am

In general yes.
Many of us have tried to get work done and no one even bothers to return phone calls or keep appointments, ostensibly because they are too busy. I personally have had people simply blow off confirmed times to come quote projects, or come by and promise a quote and then never send one and not respond to follow-ups. We had a landscaper put in three grand worth of plants and several of them were essentially DOA and he’s blown us off.
I’m sure they’ll start picking up the phone soon and you should explain to them while you’re negotiation for better prices that their style of business left a bad taste in your mouth.
Reward the contractors and companies that continued to serve you well and with respect and weren’t simply riding the 10 year bull fat and happy.

MathWizard
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Re: Contractor Pricing During Pandemic

Post by MathWizard » Sun Mar 22, 2020 10:36 am

We have a remodel starting in a few weeks. We don't plan to or expect to pay less.

People remember how you treat them, and whether to take advantage of circumstances beyond their control.

Xrayman69
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Re: Contractor Pricing During Pandemic

Post by Xrayman69 » Sun Mar 22, 2020 10:56 am

8foot7 wrote:
Sun Mar 22, 2020 10:26 am
In general yes.
Many of us have tried to get work done and no one even bothers to return phone calls or keep appointments, ostensibly because they are too busy. I personally have had people simply blow off confirmed times to come quote projects, or come by and promise a quote and then never send one and not respond to follow-ups. We had a landscaper put in three grand worth of plants and several of them were essentially DOA and he’s blown us off.
I’m sure they’ll start picking up the phone soon and you should explain to them while you’re negotiation for better prices that their style of business left a bad taste in your mouth.
Reward the contractors and companies that continued to serve you well and with respect and weren’t simply riding the 10 year bull fat and happy.
I completely agree with your sentiment.

We have been considering updating our kitchen counters and cabinets along with all 4 bathrooms. We have been looking for contractors to come out for over 2 years (PNW home) and couldn’t get a single realistic response. (100-150K project was too small).

To be perfectly honest the kitchen and bathrooms were perfectly acceptable and still are. My business is based upon relationships and saving 5-10% is not as valuable to our family as a relationship. The only thing we could get done and completed during this time was a 50K flooring project from the team that did much of the work on our home originally and the owner of the business set aside some weekend time for some of his team as a side gig for the extra money. He didn’t have the people to do the other work to the quality he would have wanted, and he was very upfront.

Other contractors never called back or made ridiculous estimates and essentially stated they were doing us a favor just coming out. I have a list and will remember to remind them that they are doing me a favor this time around. We will begin to look seriously again this summer.

JackoC
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Re: Contractor Pricing During Pandemic

Post by JackoC » Sun Mar 22, 2020 11:22 am

MathWizard wrote:
Sun Mar 22, 2020 10:36 am
We have a remodel starting in a few weeks. We don't plan to or expect to pay less.

People remember how you treat them, and whether to take advantage of circumstances beyond their control.
We're due for painting (which means also stone work, bigger project than conventional wood frame peak roof house painting). I'm not planning to rake anybody over the coals particularly but I do expect to get more competitive quotes than I would have last year when I didn't quite get around to it. That's a market.

I can see on a social level if you paid somebody $X for a very specific task (simple non contractor example, my son's dog walker) and then asked them to take a cut now just because you can, they might be angry, and people who knew about it think it was jerkish. But for some contractor project where I don't really know 'the' price and it turns out I get better prices because their business is down, I don't see a problem.

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8foot7
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Re: Contractor Pricing During Pandemic

Post by 8foot7 » Sun Mar 22, 2020 11:30 am

We were quoted something like $35,000 to lay perhaps $1,000 worth of paver stones for a 12x12 patio. Neighbors had a larger patio (3x the size) done in two weeks. That was clearly a “we don’t want to do this” quote.

I expect to be able to get that done well under 10k if this drags on for a while.

Xrayman69
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Re: Contractor Pricing During Pandemic

Post by Xrayman69 » Sun Mar 22, 2020 12:56 pm

Other than cost is quality and time consideration to complete a project.

Before big cost, took longer and drawn out if side gigs and lower quality finished product.

Even if costs stay the same or go down on,y slightly i suspect the time frame for completion and attention to quality for future references will also be an advantage.

Topic Author
DTalos
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Re: Contractor Pricing During Pandemic

Post by DTalos » Tue Mar 24, 2020 6:12 pm

How about handyman pricing? Do you all expect their hourly or project rates to be significantly less than last month?

Xrayman69
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Re: Contractor Pricing During Pandemic

Post by Xrayman69 » Tue Mar 24, 2020 7:27 pm

DTalos wrote:
Tue Mar 24, 2020 6:12 pm
How about handyman pricing? Do you all expect their hourly or project rates to be significantly less than last month?
My handyman had always been very reasonably priced for his time and ability. He is a partially retired individual and never did it for a living bit rather a side hustle to get him out of his wife’s hair. I don’t expect he will lower his price nor would I ask him.

That being said the “commercial handyman” companies may have slight decreased pricing pressure due to increased available competition. What I mean by available competition is that underwork contractors will actually pick up the phone.

Kiter
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Re: Contractor Pricing During Pandemic

Post by Kiter » Tue Mar 24, 2020 7:33 pm

I'm charging a gas fee in that I have to pay for all workers to drive in their own cars

Topic Author
DTalos
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Re: Contractor Pricing During Pandemic

Post by DTalos » Tue Mar 24, 2020 7:39 pm

Xrayman69 wrote:
Tue Mar 24, 2020 7:27 pm
DTalos wrote:
Tue Mar 24, 2020 6:12 pm
How about handyman pricing? Do you all expect their hourly or project rates to be significantly less than last month?
My handyman had always been very reasonably priced for his time and ability. He is a partially retired individual and never did it for a living bit rather a side hustle to get him out of his wife’s hair. I don’t expect he will lower his price nor would I ask him.

That being said the “commercial handyman” companies may have slight decreased pricing pressure due to increased available competition. What I mean by available competition is that underwork contractors will actually pick up the phone.

You are fortunate to have such a handyman (retired person doing side work).

OldBallCoach
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Re: Contractor Pricing During Pandemic

Post by OldBallCoach » Tue Mar 24, 2020 7:49 pm

I would never think of trying to beat up a guy on price at time like this...if anything I would offer him a bit more keep him employeed. But as others have said perhaps I can get on the schedule a little faster. Just waiting for the stay at home orders to lift...

Redlion
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Re: Contractor Pricing During Pandemic

Post by Redlion » Wed Mar 25, 2020 8:27 am

DTalos wrote:
Tue Mar 24, 2020 6:12 pm
How about handyman pricing? Do you all expect their hourly or project rates to be significantly less than last month?
I would not hire a Handyman to remodel a Bathroom or Kitchen, From my experience they are good for changing light bulbs, toilets flappers, TV mounts and other General Maintenance , although, I am sure there are exceptions.

Murgatroyd
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Re: Contractor Pricing During Pandemic

Post by Murgatroyd » Wed Mar 25, 2020 8:37 am

Here’s an analogy. We all absolutely HATE it when car dealers mark up highly popular new models. We call that price gouging. And we swear to never do business with them again and tell everyone we know to boycott them. Right?

Chewing down a tradesman’s pricing in tough times is the same thing.

JackoC
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Re: Contractor Pricing During Pandemic

Post by JackoC » Wed Mar 25, 2020 10:46 am

Murgatroyd wrote:
Wed Mar 25, 2020 8:37 am
Here’s an analogy. We all absolutely HATE it when car dealers mark up highly popular new models. We call that price gouging. And we swear to never do business with them again and tell everyone we know to boycott them. Right?
But we don't hate car dealers giving us very good deals when they have too many cars on the lot. And I actually don't 'absolutely HATE' when they mark up over MSRP for a car in high demand, I just choose another car or to postpone my purchase until that's no longer true (my last new car was one which sold at a minimum of MSRP for some time after it came out, I waited till there was a reasonable discount).

I was annoyed last time we engaged a house painter and he just never showed up, he'd undoubtedly lined up a more attractive job in a busy market. But I don't really think he committed any cardinal sin. Nor am I to expect to get better prices and service when I soon resume the search for the same painting project soon. To repeat myself, that's a market.

Topic Author
DTalos
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Re: Contractor Pricing During Pandemic

Post by DTalos » Wed Mar 25, 2020 1:12 pm

Interesting how there seems to be a lot of resistance to tradespeople lowering their prices during a recession. If the greater population is financially impacted by an economic downturn, why not lower prices?

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