When the pandemic first started, all business stopped for Steve Cunningham, owner of Cunningham Contracting Inc. in Williamsburg, Virginia. There were no calls coming in, no remodeling or renovations being requested. Then, five weeks later, "the phone started to ring," says Cunningham, who is also the chairman of the Remodelers Council for the National Association of Home Builders. "The phone has not stopped ringing for the last 18 months."
In both 2020 and 2021, he received 20% to 25% more calls than he did in 2019, all requesting new projects.
"People were home and looking at their homes in a different light," he says. "They wanted places for their children to study, home offices, kitchens, bathrooms, and outdoor spaces. More storage. More efficient storage. More countertop space."
However, this overwhelming demand coincided with supply chain delays and a labor shortage, which has made Cunningham and other contractors' jobs harder to do. "We had plenty of work and no materials," he says. "Kitchen cabinets went from 8 to 10 weeks to get, to 20 weeks."
These problems are likely to persist, says Robert Dietz, chief economist at the National Association of Home Builders. "I think from the residential construction perspective, we can expect some of the challenges in the supply chain to last well into 2022," he says.
The wait for pretty much everything has been longer, Cunningham says. Cabinets, windows, tiles, insulation for refrigerators — all are experiencing shipping delays.
"If we were waiting on something and it [normally] takes five or six weeks to get in, it might have taken eight weeks," he says. "That eight weeks went to 12 weeks and 12 weeks went to 18 weeks and 18 weeks went to 26 weeks. It's hard to give a client at timeline when you don't even know, and you can't get an answer."
Tile, for example, is predominantly made in China. Companies are competing with each other for shipping containers to load their products and export them from China as quickly as possible.
If a company does manage to snag, fill, and ship a container overseas, a labor shortage has made it so there aren't enough workers at ports to unload the supply and there aren't enough truck drivers to take the tile where it needs to go.
Large appliances have also been hard to come by, says Dietz of NAHB. "Those kinds of appliances, things that used to have guaranteed delivery time of weeks, are now taking months," he says.
Demand has not only increased delays but also driven up the prices of the materials, Dietz says. "Lumber was the canary in the coal mine," he says. "Lumber went from $350 per thousand board feet to $1,500 per thousand board feet."
Now, the price has come back down to around $800 per thousand board feet, according to Trading Economics.
"Eighty-five percent of remodelers have increased prices of their projects," Dietz says. "Half have increased prices due to higher construction costs."
The higher price of lumber, along with other products and commodities, has driven up the cost of new residential construction, too, says Rick Rudman, CEO of Curbio, a home improvement company for realtors.
"Specifically, the areas that have been a problem I think are with appliances and tile and flooring," he says. "Some tile is backordered six months that would have readily been available before [the pandemic]. Projects are taking twice as long as they have usually taken and you're seeing costs up 30%. That's across commercial building and new homes being built."
Compounding all these problems is a lack of experienced builders and construction workers, Dietz says. "There is clearly a skilled labor shortage," he says.
To keep up with building demand, 740,000 new workers per year for the next three years will need to be hired, according to a report by the Home Builders Institute that used NAHB's analysis of Bureau of Labor Statistics data.
Cunningham has felt that with his business: "There has never been a harder time in my career to hire people. Not even qualified people. Anybody."
From the client's perspective, Cunningham says he's heard responses from across "the spectrum" when he is communicating that there will be delays on their home renovations. "We've had them go, 'There's no such thing as Covid,'" he says.
For the most part, though, he says, people are understanding: "Over 90% are very understanding — not happy, but understanding."
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