Why is Remodeling so Expensive?

If you are a homeowner that has recently considered or completed a renovation project you may have suffered from some sticker shock at some point during the process. The reality of the true cost of remodeling. You watch all the shows on HGTV and see cute couples promise and deliver huge remodeling projects for under $100k and you think “Hell, I only need a bathroom so my job will only cost $5000!” or something to that effect. The reality is that HGTV is lying to you but we will cover that in another post. So here are the top 5 reasons why remodeling is so expensive.

1. Cost of Labor- Tradesmen simply make more money than they used to. Have you ever walked around an old part of town with houses built during the turn of the century that display elaborate millwork and molding details that if were to be reproduced today would cost tens of thousands of dollars? Maybe you live in a house like this. Have you ever wondered how they were able to do that? The answer is simple. Labor was cheap.

In 1920 the average carpenter earned approx $1.00 an hour. Adjusted for inflation that equals about $13.00/hr in 2017. And If I was paying my carpenters $13.00/hr I could afford to have them spend some extra time crafting and molding fine intricate details into my projects, but at $35-$50 an hour that simply doesn’t make financial sense.

2. Overhead- Your contractor has tens or even hundreds of thousands of dollars in overhead and unless you are hiring a young gun straight out of high school w/ a pick up truck and some tools, your contractor is going to be carrying a significant overhead load. Everyone’s is different depending on their number of employees and vehicles and costs of equipment, office, storage yard, insurance, etc. (My overhead for example in 2016 was over $120,000) The cost of this overhead is passed on to you the homeowner, no differently than McDonalds overhead is built in to the cost of every Big Mac they sell.

3. Labor Shortage – There are less and less people going into the trades. This means fewer plumbers, electricians and tile setters. This simple fact has resulted in higher than “normal” costs for all trades but specifically the licensed trades like electricians and plumbers. These trades are now commanding hourly rates that historically used to be reserved for lawyers and doctors. Now you plumber is spending his summers vacationing on the lake at his second home.

4. HGTV  The success of HGTV and websites like Houzz have fueled an endless appetite for high end, state of the art and highly detailed remodeling. The age of what we used to call “builder grade” is slowly fading away. These details are expensive. No frills are now reserved for cheap apartments and mobile homes while everyone who owns a house demands granite and stainless steel at a minimum.

5. Regulation The business of building and remodeling is more regulated than ever before.  New regulations in the form of laws, fines, licensing, code expansion, etc. at the federal, state and local levels, adds layers of complexity and increased cost to every new remodeling project.

Conclusion- There’s no way around it. If you want a quality and professional remodel or repair and you are not willing to do it yourself, be prepared to spend the dough.


Nathan Dishington has been a General Contractor in the greater Boston area since 2002.  He shares his experience, advice and anecdotes from the wild world of residential remodeling to TRY and help bring some sanity for both contractors and homeowners alike.


Nathan Dishington

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