Tom Reilly

Sandy:  Wow, Tom, have you been keeping up with the cost of everything these last few months? It is nuts!

Tom:  No joke there, Sandy. I can’t think of a single product that hasn’t gone up in the last year, with the exception of gas dropping from $4 a gallon by about 40 cents.

Sandy:  The construction industry is certainly no exception. Estimating and budgeting a project has to be a challenge for sure.

Tom: I am told it is. Bidding must be even worse.

Sandy:  Really, how can you anticipate the cost of an item like appliances or even paint when you won’t be buying it for six months? After you design, permit and start building, it will be at least that amount of time if not more!

Tom:  True statement. There are some guides out there that can help homeowners develop a reasonable budget.

Sandy:  Well, don’t keep our readers in suspense, where is this resource?

Tom:  Handley Wood publishes several trade magazines, one of them is called simply “Remodeling.” This group has nationwide distribution and as such, is in a unique position to obtain data across the continent.

Sandy:  I know about this group. You are talking about their Cost vs. Value report.

Tom:  Yes, I am. Not surprised you know about that. Handley Wood collects data from remodelers across the country and compiles that information into national and regional reports for about 22 different project types.

Sandy:  The report does more than relate the cost of a project. The report also presents information regarding the value a project will yield relative to the cost.

Tom:  That information is very helpful for homeowners. It can help you decide whether to move forward with a project or not.

Sandy: I know what you are saying. I receive calls all the time where people ask me if they are making an improvement that will add value to their home. My usual answer is maybe not when you look at the amount of money you will invest in the project vs. the value that project will add to your home.

Tom:  That is exactly what this report will tell you. That being said, time is a factor as well.

Sandy:  You are referring to turn-around time from project completion to a sale of the house, correct?

Tom:  Exactly. If you put in a new kitchen and don’t sell your home for a few years, the value of the home will likely go up. The remodel will help that.

Sandy:  Of course, the market you are in will help also.

Tom:  Oh my, yes. In fact, this report is so comprehensive, it tracks cost differences by national, regional, major cities in a region and by zip code.

Sandy:  Do they track Prescott?

Tom:  Well no. Thankfully, we are not a major city. They do track Phoenix and Tucson though.

Sandy:  Let’s give our readers some information. First of all, the 2023 report is not out yet, so the current report is for 2022. We already talked about how inflation is affecting the construction industry so the numbers will not be as accurate for 2023. That is why people can use this as a guide, and not a hard and fast fact.

Sandy:  Knowing that, which project has the highest return on investment?

Tom: That would be a garage door replacement. The national average cost is $4,041, with return on investment 93.3%.

Sandy:  How does that differ for the Phoenix average cost and ROI?

Tom:  For a garage door replacement in Phoenix, the average cost is close to the national at $3,994, with an ROI of 93.1%

Sandy:  So, if I wanted to sell my house and my garage door looked bad, this would be a worthy project to undertake. This information would be helpful for realtors also. It can help them guide their clients to appropriate decision making.

Tom:  It sure could.

Sandy:  Tell our readers which project has the lowest return on investment.

Tom:  That would be an upscale, master suite addition. The national average cost is $338,862, with a return on investment of 45.8%. The Phoenix average cost is $328,327, with an ROI of 52.7%.

Sandy:  Yeah, don’t do that if you are thinking about sprucing up your home for sale. I know that a report like this cannot predict what future home values would be, but having this information can help a homeowner budget realistically for a project.

Tom:  That is one of the report’s real strengths. Many professional remodeling companies utilize this report as a means to assist folks in establishing a very preliminary budget.

Sandy:  People need to realize, though, that these numbers are averages. That their operating budget will vary based on their choices for materials and design.

Tom:  Absolutely. Thank you for clarifying that.

Sandy:  So, while helpful, people will need to get their contractor to flesh out a project’s real costs.

Tom, we know the most watched indicators of the rate of inflation are the costs of various construction materials and the labor needed to install them. However, the level of construction activity has a direct influence on labor and material demand and margins and therefore on construction inflation, would you agree?

Tom: Yes, I agree. One of the best predictors of construction inflation is the level of activity in an area. When the activity level is low, contractors are all competing for a smaller amount of work and therefore they may reduce margins in bids. When activity is high, there is a greater opportunity to submit bids on more work and bid margins may be higher. The level of activity has a direct impact on inflation.

Sandy: I am a firm believer that regulatory costs, because they are increasing, go straight to the bottom line of what individuals pay for their homes. A clear regulatory code with a reasonable amount of restrictions will make the end product less expensive for homebuyers.

Tom: Sandy, this is another topic for another month – I know you are passionate about codes, zoning, requirements, fees, etc.

Sandy: So, I guess we are signing off. Until next month. P.S. I have had enough of Punxsutawney Phil – I know we need the moisture, but I am over shoveling my driveway!

Thanks for stopping in to read At Home With Tom and Sandy. You are in good company, and we love sharing educational, fun and important information with you. QCBN

Tom Reilly, Architect, Renovations, 928-445-8506 renovationsaz.com

Sandy Griffis, Executive Director, Yavapai County Contractors Association, 928-778-0040

Remember to tune in to YCCA’s Hammer Time every Saturday and Sunday morning 7 a.m. on KQNA 1130 AM/99.9 FM/95.5FM or the web kqna.com. Listen to Sandy and Mike talk about the construction industry and meet your local community partners. Hammer Time is a great way to start your weekend.

Tom:  Hi, Sandy. I have a topic that I would like to put forward for this month. You are always talking about the hundreds of calls you get from folks in our area, and I have always wanted to ask you, what are the types of calls you receive? Are you up for that?

Sandy:  Yes, Tom, that could be fun. I do get some strange requests for information.

Tom:  Great! Let’s get started. What is the strangest request you get the most?

Sandy:  OK, the most consistent call I get, at least the one that makes me smile and wonder why they called YCCA, is from families new to the area wanting to know when their trash pickup day is. I must get this call several times during any given year.

Tom:  That ranks right up there with things that make you go, “Huh?” What do tell them?

Sandy:  Well, I start by asking them which jurisdiction they are in. They need to know if they are in the City of Prescott, or if they have private pick-up in Prescott Valley or Yavapai County and then I give them the applicable companies to call. I live in Prescott Valley, so I have that pick-up day down pat!

Tom:  I can see where this sort of thing takes some time on your part.

Sandy: It is all part of our goal to share and educate. That is so important.

Tom: It is for certain. What other types of calls make you go, “Hmm?”

Sandy:  Well, a weird one is from people who want to know where I buy tires.

Tom: OK! That is a little out of the scope for YCCA, isn’t it?

Sandy: Yes and no. While not a construction related question, it does speak to the reputation YCCA has as a trusted place to turn to for everyday answers.

Tom:  YCCA outreach is ubiquitous for sure. Not a day goes by that I do not hear some manner of reference to you or the YCCA. Readers of this article, when I let them know that we write this, refer to me as, “You’re the guy with Sandy! You are famous.”

Sandy:  Well, I don’t know about that, but it is gratifying that YCCA is so well trusted in our community. I also get calls for the names of a seamstress and where I get my hair cut.

Tom:  And, you know a seamstress or two. Do you tell people where you get your hair done? Or is that a trade secret (pun intended)?

Sandy:  Well, yes, I do know a seamstress and not a trade secret as you put it, but no, I don’t let on where I get my hair done, who would want a head of hair looking like mine? LOL. Another call I get frequently is when people think they need a new roof when they do not have any symptoms.

Tom:  Symptoms, such as…?

Sandy:  No leaks, no broken tiles, no missing shingles, no mineral particles building up at the downspouts. And their roof is only five years old. They want three or four roofers to come out and inspect.

Tom:  I get it. What do you tell them?

Sandy:  Well, once I understand their concerns, I usually tell them they really do not need all that.

Tom:  It’s kind of like talking them off the ledge.

Sandy: Exactly. I usually get calls from people who do not necessarily understand the process they need to go through. They put the cart before the horse. I take the time to help them understand what they need to do and in what order of sequence.

Tom:  I imagine many people are grateful.

Sandy: They are usually grateful for the information. There is always a retired engineer that knows what needs to happen and just wants a name. I try to drill down a little, but they just want a name. I might hear from them again a month later wanting more assistance, which I willingly provide.

Tom:  Let us talk a little bit about the information and advice you give out. I imagine you get lots of calls for subcontractors and contractor recommendations, how do you determine the names you give out?

Sandy:  Good question. The usual inquiry will go something like, “OK, Sandy, you gave me three names. Which one would you use?” And I just don’t go down that rabbit hole. I just give them the names and tell them any one of those companies would be happy to assist.

Tom: Smart. So let’s get back to how you choose what name to give out.

Sandy: I spend time with the caller to find out more of what they are looking for. I try to understand their project needs and where they live. With all this information, along with knowing all my lovelies out there, I try to give out three or four names of who I think will fit their needs. If somebody calls me about a project in Paulden, I try to send them to businesses I know will go there. That is usually not somebody from Dewey-Humbolt.

Sandy: Another frequent call is from homeowners wanting a window company and window replacements. After talking with the homeowner, we find out they just need glass replacement and there is nothing wrong with the window, it does not leak, it operates great and all that is needed is new glass.

Tom: So, you must ask a lot of questions. And knowing you, Sandy, you do not blindly accept the questions and give information.

Sandy:  You are right, Tom. Sometimes it is like an analysis and synthesis of figuring out what the issue is and coming to the right decision on how to manage a problem or answer a question.

Tom: Serving the community, engaging in a partnership, moving obstacles, being relevant to the community, sounds to me like what YCCA does.

Sandy: And Tom, I receive a gazillion questions on mold, deck replacements, permitting questions, survey questions, square-foot price to build, and as you know the list goes on and what is even more exciting is that I have an entire treasure trove of contractors to call. For example, you have been my “lifeline,” my “call a friend” and my Wikipedia.

Thanks for stopping in and reading “At Home with Tom and Sandy.” You’re in good company and we love sharing educational, fun and important information with you. QCBN

Tom Reilly, LEED Accredited Professional, Architect.

Sandy Griffis, Executive Director, Yavapai County Contractors Association. (928) 778-0040

Remember to tune in to YCCA’s Hammer Time every Saturday and Sunday morning 7:00 am on KQNA 1130 am/99.9 fm/95/5fm or the web kqna.com. Listen to Sandy and her wingman Mike talk about the construction industry and meet your local community partners. Hammer Time is a great way to start your weekend.