What’s Subprime mean to me?

Plainly said, it should mean nothing, but that’s simply not the case is it? This should be the best of times for remodelers and builders. The cost of money is still at an all time low, material is readily available, there’s an available workforce, and you’re a better than average contractor . . . just ask anybody. Trouble is Mr and Mrs. Anybody doesn’t live here anymore . . .

We, contractors, are taking a pretty hefty hit over events which we had nothing, absolutely nothing to do with. For the most part we don’t sell real estate nor generate loans for home buyers. It’s clearly not our fault that unsophisticated mortgage seekers smitten with ill-place ego buy more than they can afford, but we are paying the price just as if we were, somehow, at fault. If we have a fault, it’s not educating clients better, through better marketing, but that for another time.

Contractors with a head for business and the ability to continue to market will survive. Those lacking one or both will probably not, but there may still be a light at the end of the tunnel. By that I mean we are seeing more and more contractors, especially remodeling contractors, scaling back their operations, cutting their overhead by getting rid of in-house cabinet shops, and though it’s hard to do, lying off employees, choosing to be paper generals.

Most of these contractors are maintaining decent margins, working fewer hours, and just as importantly, satisfying their clients. Instead of fielding a plethora of employees in expensive vehicles, they are hiring one or two smart, talented, dedicated project managers who know how to get the job done with fewer hiccups, and keeping sophisticated clients, those with 7, 15, and 30 year conventional mortgages, happy.

So who’s doing the actual hammer swinging? Yes, that would be the contractors of yesterday who didn’t have the back log of clients in-waiting are now today’s subs, or they’re doing installs for big orange and big blue getting the mouse’s share of the pie.

But I digress . . . there have been tough times in the past, there will be tough times in the future. Some will survive by adapting to the times, rearranging their business model, and doing what’s smart, not expedient. As my son is fond of saying, “Sleep, food, water . . . they’re only a crutch.”