Homeowners are making a mad dash to their local contractors to secure bids and calendar spots for their renovation projects. But why the sudden urgency?
Contractors are busier than ever before, leading to a decrease in availability and an increase in demand. If you want to get your renovation project off the ground before the end of the year, you should start your search for a contractor today. With a growing backlog (particularly in the residential construction industry), it’s more important than ever to get on your contractor’s schedule as soon as possible.
In this article, we’ll take a look at the reasons behind this increased contractor demand and explain how you can ensure a successful and timely remodeling project.
Construction Industry Conditions
The availability, price, and work pace of contractors are always the result of construction industry conditions. In 2021, the construction industry is fast-paced, contractors are less available, and remodeling is a more costly proposition. In fact, between July of 2020 and July of 2021, the total dollar value of construction work completed in the United States rose by nearly ten percent.1
These market conditions are primarily informed by rising material costs and a persistent trade labor shortage.
Rising Material Costs
As a result of tariffs, increased demand, and damaged supply chains, construction material costs for residential projects have increased by nearly eight percent between April 2020 and March 2021.2
Tariffs and import restrictions result in increased prices as supply decreases and demand increases. What’s the cause of this demand? With more time at home due to COVID-19 shutdowns, more people are finally pulling the trigger on their renovation plans.
The pandemic has also impacted supply chains. Widespread layoffs and temporary halts on manufacturing due to infections in warehouses and fabrication facilities drastically impacted the manufacturing industry’s ability to keep up with demand.
But the construction industry had a staffing problem long before COVID-19 began ravaging the U.S.
Trade Labor Shortage and Increased Labor Costs
Public school philosophies have changed throughout the last decade. As more students are encouraged to pursue higher education (whether or not a college degree would be relevant for their desired career path), attendance has decreased for both:
- Trade schools
- Trade education courses in public schools (like cooking classes and woodshop)
The construction industry has been bearing the weight of the American trade labor shortage. Now, the phenomenon has come to a head in the 2020s. With a smaller workforce, construction trade employers have had to increase wages to remain competitive, resulting in increased labor costs for their clients.
To fund their increased overhead costs, contractors have had to significantly increase production, resulting in less contractor availability for remodeling projects. While increased materials costs and trade labor shortages were existing construction industry maladies, the COVID-19 pandemic only magnified these challenges.
Impacts of the COVID-19 Pandemic
COVID-19 has increased demand in the construction industry. People spending more time at home likely have more time to brainstorm potential home improvement projects that they’ve been putting off, and quality-of-life improvements seem only more pressing to people spending most of their time at home. The pandemic has also inspired new renovation projects, especially those geared toward creating at-home working and learning environments.
Improvements to Home Office Spaces
By the first week of April 2020, approximately 31 percent of workers who had been employed in person in March 2020 had begun working from home.3 As a result, many workers had to create at-home workspaces overnight, and some concluded that there simply wasn’t a viable home workspace available to them.
Improvements to home office spaces have skyrocketed due to the COVID-19 pandemic, filling up contractors’ already-packed calendars. As the demand for renovated home office spaces increased, contractors’ availability decreased.
If you’re trying to get started on a window glass replacement project, for instance, you’re likely going to be competing for a spot on a contractor’s schedule with customers seeking a home office renovation. With contractors experiencing an increased backlog, it’s important to get your renovation project on the schedule as soon as possible to bring it to fruition.
Improvements to Online Learning Spaces
Renovations for online learning spaces for children in virtual schools are also on the rise. Working at the dining room table is a temporary solution and one that falls short for families with more than one virtual student in a household.
Renovations to create new workspaces for kids (such as adding built-in desks to bedrooms or adding modular workspaces to dens or living rooms) are relatively minor construction projects. But projects like these are often the bread and butter for small contractors and a wise investment for word-of-mouth advertising.
However, an increase in these types of minor residential projects still impacts contractors’ schedules, taking up space on the calendar and contributing to the backlog. Plus, some clients use a small project as a test run with a contractor before assigning them another larger project, and repeat customers are likely to be bumped up on the schedule as a reward for their loyalty.
Improvements to Home Recreational Spaces
People spending more time at home due to COVID-19 aren’t only focusing on renovating their workspaces. They’re also finding more ways to bring their favorite activities home with them, making renovations to their recreational spaces at a staggering rate.
For instance, the swimming pool construction industry alone grew by nearly four percent between 2019 and 2020 and nearly three percent between 2020 and 2021.4
People choosing to stay home to avoid infection are adding more recreation opportunities to their homes to improve their quality of life, and these renovation projects are keeping contractors busy.
Why are people spending money on quality of life improvements when they could sell their home and buy one that’s better suited to their needs?
A nationwide decrease in real estate inventory is one of the most significant driving factors to an uptick in residential renovations.
Lack of Real Estate Inventory (And the Resulting Remodeling Craze)
There’s a staggering lack of inventory in the U.S. housing market today. According to an August 2021 report from the U.S. Department of Housing and Urban Development (HUD), the number of existing homes for sale in July of 2021 was 21 percent lower than in July of 2020, representing a significantly reduced number of homes on the market compared to last year.5
Confronted with a lack of homes on the market, homeowners are making the best of the situation by renovating their existing homes, whether they’re owned outright or still being mortgaged. In addition, the same HUD report indicates that new home construction in July 2021 was up nearly 12 percent from one year prior. Between renovations and new construction, residential contractors are busy.
In a housing market with decreased inventory, it’s easy to attribute construction industry growth (and decreased contractor availability) to the decreased likelihood of new home sales. If people can’t buy a new home, they’ll be hesitant to sell their existing home; if they stay in their current home, they’re more likely to renovate to meet their residential needs.
With a decrease in residential real estate inventory and an increase in renovation projects, it’s important to retain a contractor for your remodeling project as soon as possible to ensure timely improvements.
Energy Efficiency
Increased political and social discussions of climate change have also motivated homeowners to find new ways to decrease their carbon footprints. In fact, the Department of Energy estimates that heat gain and loss through home windows account for 25-30 percent of all household energy costs.6 This means replacing the windows in your home could decrease your energy usage and your electric bill, improving the planet’s health while saving you money.
The move toward improved household energy efficiency and the potential for increased savings has increased these kinds of home renovation projects.
While some people are qualified to replace their own fixtures and appliances with more efficient models, many rely upon the expertise of a contractor to improve their home’s energy efficiency. This increased awareness of energy use has only raised the demand for residential contractors.
Scheduling Is Key to a Successful Remodeling Project
The most important part of any renovation project is getting started. But the current construction industry moves at the behest of several factors, including long-standing industry challenges, changes prompted by the COVID-19 pandemic, lack of real estate inventory, and the pursuit of at-home energy efficiency. Supplies are in high demand, schedules are full, and contractors are maxed out. That’s why starting a renovation project is a taller order than ever before.
Fortunately, the Glass Guru can help. If you’re looking to get a glass replacement or repair project underway as soon as possible, contact The Glass Guru today for a free estimate. Our team of industry experts is ready to help you take the first step in your home renovation project. Let us add you to our schedule so we can get your project underway as soon as possible.
Sources:
- United States Census Bureau. Value of Construction Put in Place – Seasonally Adjusted Annual Rate. https://www.census.gov/construction/c30/pdf/totsa.pdf
- Cato Institute. How U.S. Trade Policy Helped Construction Materials Costs Go Through The Roof. https://www.cato.org/blog/how-us-trade-policy-contributes-our-insane-construction-materials-costs
- US Bureau of Labor Statistics. Ability to work from home: evidence from two surveys and implications for the labor market in the COVID-19 pandemic. https://www.bls.gov/opub/mlr/2020/article/ability-to-work-from-home.htm
- IBIS World. Swimming Pool Construction Industry in the US – Market Research Report. https://www.ibisworld.com/united-states/market-research-reports/swimming-pool-construction-industry/
- US Department of Housing and Urban Development. Housing Market Indicators Monthly Update – August 2021. https://www.huduser.gov/portal/sites/default/files/pdf/Housing-Market-Indicators-Report-August-2021.pdf
- US Department of Energy. Update or Replace Windows. https://www.energy.gov/energysaver/update-or-replace-windows
