An economic downturn, a recession, or even a depression in the U.S. economy is an excellent time to engage in a little home remodeling. The housing market woes have certainly affected both new home sales and construction and home remodeling. A bad economy has just made things worse. A look a the Remodeling Sentiment Report for the fourth quarter of 2008 demonstrates the effect of the downturn. This is underscored by the findings of a study of remodeling contractors across the company:
· Fourth Quarter job averages dropped from 41.8 in 2007 to 17.6 in 2008
· Calls for bids on new jobs during the fourth quarter dropped from 39.9 in 2007 to 18.8 in 2008
· Work Committed for the next three months dropped from 35.1 in 2007 to 16.2 in 2008.

What many homeowners don’t seem to understand is that remodeling is smart during a recession. There are, of course, some very good reasons for putting off plans for remodeling projects or home additions. But an economic downturn usually triggers several other conditions that allow homeowners to get a really good deal on home remodeling projects. When most people are delaying or deciding against remodeling, many contractors, sub-contractors and skilled workers are finding that the work they expected is drying up. When new home construction is down, the contractors and workers who usually work on new homes are often looking for remodeling jobs to earn a living during the slump.
The combination of a recession with a decline in new home construction causes an abundance of labor that can help homeowners get a good deal on home remodeling and additions. This is what happens:
First, with a decrease in demand, the cost of many building materials drops. This has happened during the past few years with such materials as lumber, plywood, sheet rock or drywall, floor coverings, and much more. To encourage sales, prices are reduced. This reduces the cost of a remodeling project – the first reason remodeling is smart during a recession.
Second, people need to keep working, even during economic downturns. When there is a lot of skilled labor available for jobs, many are willing to work for a lower hourly rate than usual, just to keep working and keep a paycheck coming in. This also reduces the cost of a remodeling project, usually without sacrificing the quality of the work or the finished product. In fact, it often means homeowners can afford to hire workers with better skills and reputations than usual. This applies to both independent workers and to workers who are part of a contractor’s hired team. Whether the contractor and the workers agree to drop rates so they can keep working or the contractor lowers his/her rates so s/he doesn’t lose a good crew, the result is the same. Either way, the cost of the remodel is lower.
Third, contractors and sub-contractors need to keep working, too. If they are to be competitive in bidding on the small number of available projects, many will reduce their prices. Again, quality is not sacrificed for the lower price, but the result for the homeowner is still a reduction in cost.
Finally, less work and more people available to compete for the work usually means contractors have a smaller number of jobs running concurrently. The crews are also working on fewer jobs. Often the sub-contractors and work crews are assigned to only one job at a time. This means your job gets done faster.

These are the four main reasons remodeling is smart during a recession. Your contractor will have access to the best sub-contractors and work teams. The contractors you interview will be competing for the job and offering lower prices. At least some of the building materials will cost less because of price reductions, and your job will be finished faster. These are all great reasons to remodel now.