Like just about everyone who’s pined for a dream outdoor space in recent years, Jessica Tran had heard horror stories about sky-high costs, outrageous timelines to finish the work and fierce competition to land a spot on a contractor’s schedule — or even get a call back.
“You were lucky if someone actually stuck with you and finished the project,” says the 35-year-old teacher.
But three years after she and her husband moved into their Novato, Calif., home, they decided this winter that their backyard makeover could no longer wait. They’d hardly gotten any use out of the area, says Tran, describing it only half-jokingly as a place “somebody threw a bunch of seeds … and decided to see what would happen.” Now with two young children, the couple wanted “a usable, functional, kid-friendly space.”
To Tran’s delight, when she started asking for bids in late December, the responses arrived swiftly. Within a month, three different contractors had come through for site visits — two of them visited more than once — and prepared estimates. All of them were willing to go back to the drawing board and resubmit to fit Tran’s $50,000 budget. “There was definitely more follow-up than I expected,” she says. Overall, she describes the process as “a fairy tale.” Yes, seriously.
Her experience isn’t unique. After more than three years of landscapers and outdoor contractors holding all the cards, the power dynamic has shifted. The pandemic-fueled glut of backyard projects has slowed considerably since it peaked throughout 2021 and 2022. As a result, homeowners report that companies are once again open to negotiating terms and pricing. Finally, the client has regained some control.
The work outside Tran’s home entailed stripping every living thing out of the old backyard, adding pavers underneath a preexisting pergola, laying down artificial turf, and installing a perimeter of drought-resistant plants with a self-watering irrigation system. The project wrapped up in mid-March, about seven weeks after work began. It ultimately cost closer to $56,000 due to a fencing issue and a tree that unexpectedly had to come down. Not a big deal, says Tran, since she budgeted with some wiggle room. The fairy tale remains intact.
For the contractors, things aren’t quite as dreamy. Zach Brashear, founder of Cutters Landscaping in Austin, says the change in his business has been dramatic. A year-and-a-half ago, he says his company was fielding 35 to 40 leads for new work every week. “People were approving estimates left and right,” he says. With more projects than contractors, homeowners were out of luck if they wanted to haggle about his pricing. “We’d be like, ‘Hey look, I’m very sorry but this is our price, and this is what we’re going to stay at.’”
This patio season, however, is a different story. While the business still gets about 20 to 30 inquiries from potential clients every week, “it’s harder to get them to say yes right now,” says Brashear. So, if a homeowner wants to negotiate, he usually hears them out. As long as the customer is within a reasonable ballpark, “we will give the discount to do the job, and take a slightly lower profit margin right now … to keep our guys going.” Brashear has also become more flexible about the terms of payment, such as what percentage of the total he requires upfront.
He says he gets why customers aren’t as quick to say yes as they were 18 months ago. He, too, has some projects he’d like to do around the house, but now that we’re beyond the worst limitations of the pandemic, there’s just a lot more to spend his money on. For instance, he wants to take his wife to Italy. So, extending their outdoor kitchen and adding more landscaping to their own yard will have to wait.
Allison Messner, CEO of landscaping design service Yardzen, similarly observes that homeowners have become much more deliberative. “During the pandemic and the trailing 12 months, we saw a lot of clients meet with just one contractor, and then hire that contractor,” she says. “Now we’re seeing homeowners take a lot longer to make their choice, and they’re talking to multiple different contractors, getting multiple different bids, comparing them to one another.”
Yardzen — which links homeowners with local contractors — has recorded an 85 percent increase in clients connecting with more than one contractor for an initial meeting since early last year. During the same period, the company has logged a 122 percent increase in clients receiving multiple bids.
Higher interest rates, of course, are also playing a role.
During its Feb. 20 earnings call, that’s where Home Depot pinned some of the blame for the downturn it’s seen in home improvement spending. Edward P. Decker, the company’s president and CEO, maintained that rates were part of the reason “people are just being conservative [about] when they kick off a larger home improvement project.” Lowe’s also saw consumers pulling back from spending on home improvement, to an even greater degree than Home Depot, according to that company’s Feb. 27 earnings call.
Harvard University’s Joint Center for Housing Studies — which forecasts spending on home remodeling and repairs, including in outdoor spaces — anticipates this downward trend will endure for the rest of 2024. Still, says Abbe Will, associate director of the center’s Remodeling Futures Program, it’s important to keep in mind that everything is relative.
The pandemic had such a massive impact on home-related spending that a comparative decline could still mean “phenomenal spending,” she explains. And by next year, Will expects the home improvement industry will again be on the rise, with clients once again competing for contractors. (Her organization calculates its outlooks by assessing data such as home prices, home price appreciation, remodeling permits and broader measures of the economy.)
In California, Jessica Tran seems to have timed her backyard makeover just right. The new outdoor furniture is already in place, and the play structure is about to arrive. She says she can’t wait to see the look on her toddler’s face when he gets to go down his very own slide — and to just “be outside with our family.”
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