Those willing to spend can find great remodeling deals

ORINDA, Calif. -- In this wooded, high-end suburb near San Francisco, Darien Destino isn't accustomed to getting deals from people who work on her house.

But the dour economy — which has hurt the home renovation business — has a silver lining for her and others with cash or strong home equity.

Destino and her husband, Don, recently had their 3,000-square-foot home painted by the same contractor who bid 40% more for the job two years ago. The pine trees crowding the front yard were removed for half the cost requested in 2007.

The tree remover "knocked on our door," says Destino. The day after giving an estimate, he arrived with a crew. "Usually, we have to wait," says Destino.

The couple — confident that Don's financial services job is secure — are considering whether to landscape their yard. Previous estimates will be revisited, Destino says.

"We're going to see what companies can do," says the stay-at-home mom.

The Destinos are on the winning end of conditions that are wreaking havoc with home and landscape renovators nationwide. Rising unemployment, falling home values and diminished stock market portfolios have cut demand for home renovations, while many construction firms, idled by the collapse in new home building, look for work.

That's driven savings for those who renovate. Despite some signs of a bottoming in the housing market, contractors coast to coast say they're bidding jobs for less than they would have two years ago. Lower costs for material, such as lumber, help. But mostly, contractors are paying less for labor, or they're cutting their profits.

"There're a lot of hungry contractors out there," says Mark Scott, owner of Mark IV Builders in Bethesda, Md.

He estimates remodeling costs in his region are down 15% from two years ago. He's laid off 16 of 26 people.

Nationwide, the home improvement market is expected to shrink 12% this year to $217 billion for owner-occupied properties. That's after a 10% decline last year, says Harvard University's Joint Center for Housing Studies.

"This is a window for remodeling," says Jim Haughey, chief economist for market researcher Reed Construction Data. He just had his driveway repaved for 30% less than he would have paid three years ago, he says, and saved 25% off labor rates of 18 months ago to put tile in a kitchen. "It's a good time to do the work if you've got the money or the credit," he says.