Think you can turn your second home into your dream home? Think again. A shortage of labor, lumber and other materials is prolonging renovations and inflating prices.
This is yet another byproduct of the Covid-19 pandemic. Those with the luxury of second homes retreated to them to escape the population density of cities. Second homes have doubled as workplaces for many. Builders say the requests have been pouring in to make those homes more utilitarian.
“People have more time in their house to notice what they don’t like and what they want done differently,” said Jared Loveless, president of Vector East Ltd., a general contractor based in the North Fork of Long Island outside of New York City.
Vector East Ltd.
The challenge? Manufacturing is still rebounding after more than a year of shutdowns and social distancing. Here’s the grim reality of the situation, according to May’s National Association of Home Builders/Wells Fargo Housing Market Index:
More than 90% of builders surveyed reported shortages of appliances, framing lumber and wood panels.
Lumber alone seems to be causing the most consternation. In 2018, 31% of builders reported a shortage of framing lumber, a record at the time. Now, 94% of builders say they are scrambling to find lumber.
Exactly 90% said there was a shortage of plywood, and 87% said there was a shortage of windows and doors.
The scarcity of plywood, framing lumber and copper wiring jumped by at least 70 percentage points.
Finally, if you’re hoping to outfit your second home with a new stove or refrigerator, prepare to wait longer. Historically, builders have not complained about appliance shortages. Now, 95% say they are having a hard time finding appliances — the highest of any shortage the association has recorded since it began collecting information in the 1990s.
Paul Emrath, vice president of surveys and housing policy research at the National Association of Home Builders, calls these unprecedented times for the industry.
Vector East Ltd.
“Nothing was much of a problem and now everything is a problem,” he said. “One of the reasons shortages are acute now is that demand is so strong. The supply constraints are really hurting…. People are looking for more spaces and homes that can accommodate more activities.”
If that wasn’t bad enough, there’s also the labor issue. There were 299,000 open construction jobs in May, according to the Bureau of Labor Statistics Job Openings and Labor Turnover Survey.
“As a builder and employer, finding employees right now is next to impossible,” Loveless said. “Contractors who would have done things in-house prior to this are now plugging the gaps using more subcontractors.”
In jurisdictions that require permits for certain projects, chaos can often ensue, with limited personnel working limited hours.
“Just because a lot of people are doing things doesn’t mean these towns can keep up with building inspections and permits,” said Charles Petersheim, founder of Catskill Farm, a building company in the Hudson Valley of New York.
Who ultimately bears the brunt of the burden? The homeowner, of course.
Vector East Ltd.
“Everything is taking longer. It’s slower and more expensive,” said Michael Ziman, president and co-owner of Ziman Development in Long Beach Island, N.J. “I try to be factual and tell (my clients) the challenges that they’ll be facing. We need to plan better in order to execute it in the way we’ve done so in the past. It’s gotten significantly worse.”
And he doesn’t expect it to normalize any time soon. “That’s probably going to take a while,” he said.
Few people seem to be discouraged, though.
The Joint Center for Housing Studies at Harvard University has predicted a robust year for remodeling; experts attribute that to a strong housing market and increased home equity. The center predicts that remodeling and repairs to owner-occupied homes will jump to $352 billion this year, a 3.8% increase over last year.
One upside of the pandemic—if you can dare to say there is one—is that people have saved money from not commuting to work, not dining out as much and not vacationing.
“It’s absolutely bananas how much real estate is being moved and renovated locally,” Loveless said.
The heated market for second homes also created a situation where many properties in neighborhoods that were built in the 1960s or even before were put up for sale, sometimes for the first time since they were built.
“They were not the type of houses that a modern family or people with modern tastes would want,” Loveless said.
Petersheim of Catskill Farm said some of the most popular renovation requests have been to carve out private spaces out of open floor plans, to build garages and to add swimming pools. Then there are necessary fixes, such as rewiring or adding generators, and cosmetic changes, such as landscaping.
“The second home market has been redefined as the primary home market because so many people have had more flexibility with their work,” Petersheim said. “All the things that didn’t matter when you were lightly using your home quickly become annoyances and impediments as you convert it into a vital tool for your live-work experience.”
The need to create work spaces at home will likely continue for a while. “There’s going to be a rebalancing of work, and it’s for everyone’s benefit,” Petersheim said.
Chances are, if you are reading this, you already know it’s a tough time to renovate. Here’s some quick advice:
Delay. Do you really need a custom pantry right now? Perhaps find something at Target or Ikea that works until things calm down.
Buy old. You can get a deal on refurbished appliances both at stores and online. We’ve had good luck with LQD Deals on eBay (ask for Daniel O’Conner and tell him The Escape Home sent you), but also local appliance shops that might have inventory “in the back” and are willing to sell.
Tweak your renovation. We didn’t trust that the tiles for a bathroom wall would really take a few weeks so we decided to leave them bare.
Factor time into home-buying decisions. If you are shopping for a second home, adjust your mindset to this being a several years-long (years, yes, plural) project and not immediate.
Relax. It’s a global pandemic. Much of the world is still not vaccinated and doesn’t have the privilege of choosing among Pfizer or Pfister, Moderna or Miele like you do. Be grateful and patient.