What to Know About the Remodel Industry Before Your New Project
A year ago, in June 2020, Houzz reported a 58% surge in project leads for its member remodelers.
Articles popped up all over the web talking about the home renovation boom. With rolling lockdowns and LOADS of people working from home, the “home” they wanted to spend all that time in had to get a major facelift.
Kitchen and bath remodels were always the most popular choices, but even those saw a 40% jump that month. And when you think about it…with more people cooking and eating at home, the kitchen had taken on a totally new life for countless families.
Other factors contributing to the hike in demand included “finally having money” (once homeowners spent less going out) and “finally having time” (with reduced commutes to and from work).
By the end of the year, more than 75% of homeowners said they had done some kind of home improvement during the pandemic.
What did this mean for the remodeling industry? Was it all good times with remodelers raking it in?!
…Not quite.
As it turns out, there were some lasting impacts on the remodeling industry that, now, every homeowner should know before getting into that next dream project.
It’s still a great time to kick your project off, just get educated on these key industry considerations before you do!
It’s Not Just the Pandemic…
It’s pretty interesting to break down all the ways that the pandemic affected how we live at home. Most of us are still processing them and discovering new ones every day!!
Some of the ways the pandemic affected the remodeling industry might surprise you, too.
The thing is, it’s not just the pandemic that made waves in the industry last year. Another HUGE factor was homeowners getting bigger incentives from their record amounts of home equity.
Going into 2020, before a pandemic was in anyone’s predicted forecast, homeowners in the U.S. were already “sitting pretty” thanks to rising home prices. Right when lockdowns started to hit in March 2020, more than 15 million homes were already considered “equity rich” (meaning mortgages were 50% or less of the value of the home).
“So,” homeowners asked themselves, “what to do with those funds?…”
Put them right back into the home, of course!!
And It’s Not Any One Generation…
It’s not any one generation who got in on home remodeling the last 16 months, either. In fact, ALL generations are spending more on home improvements—even those who were already retired, for whom the shift to virtual work wasn’t an incentive.
Millennial and first-time home buyer spending is definitely up most of all, and for anyone looking to the future of the industry, this means the strong trends from 2020 will continue far into the future.
What I’ll be SUPER interested to see when someone studies it is a breakdown of what kinds of projects each generation is favoring…where a Baby Boomer might be looking to transition a bathroom or kitchen to a universal design, for example, a Gen-Xer might be installing a pool instead!
Supply Chain Considerations
One of the biggest impacts of the HUGE surge in remodels this year and last has been its lasting effects on the supply chain…
This is true for all the products, appliances and selections that go into a remodel…and it’s ALSO true for raw materials.
Specifically, major delays in the supply chain have been the principal consequence of all that new demand in the industry.
For exam
ple, it’s easy to see why so many homeowners we work with LOVE the DeWils custom cabinetry we design and install. (Just look at the custom cabinets to the right.) Can you imagine what a locally-based company like that has had to do to support the demand spike, though?
Know this…DeWils usually had around 25 orders a week before the pandemic. This March (2021, a year after the first lockdowns), they had OVER 300!
This has required MAJOR hiring on their part, not to mention updating of processes and accommodating as many orders as possible with existing machinery and supplies in place.
Naturally, this kind of supply chain issue has resulted in significant delays for homeowners doing remodels. Their projects still get in the pipeline but with lagging delivery dates, often a number of months.
There have been plenty of raw material issues in the supply chain, too, partly because of logistics demands. Trucking and shipping companies suddenly had billions of dollars of NEW online purchases to move above what they were prepared for.
And, of course, with more demand for more raw materials, the originating producers had a very hard time keeping up…
The supply chain issue is the one that impacts your next remodel more than any other. If you’re about to kick off your next project, it might take three or more months before a contractor can even start!
And once your project has started, it’s likely that cabinets, appliances and materials will all be backlogged, too.
Still…if you don’t start now, you’ll just be in for more delays later, because the demand is still climbing.
Demand in Outdoor Areas
On a trendier note, one of the areas of the home that saw the BIGGEST increase in demand was the design of outdoor areas. Searches for pool installers, deck professionals and hardscapers came in THREE TIMES HIGHER in 2020 than they did in 2019.
Pool demand was so strong, in fact, that investors started pumping more money into pool supplies companies!!
Furnishings for existing outdoor areas, too, was a simple and hugely rewarding investment for homeowners. It’s like we learned to enjoy our yards in a new way, or at least on a new level…whether we were entertaining with a safer “social distance” or just sitting outside to read a book with that new “found time,” those Texas sunsets took on a new life last year…
What are the Neighbors Doing?!
Picture it…there’s a remodeling truck outside your neighbor’s home.
What could they be doing?!
If your neighbors are jumping on the outdoor remodel wagon, you’ll be able to see it.
Then, there’s all the work they might be doing INSIDE.
Are they installing a home gym? Redoing their bathroom? Switching out the
appliances in their kitchen?
Whatever the project is, with current industry trends you can bet on one thing…the neighbors’ project is definitely turning their home into more of a retreat. Homeowners are looking to get more out of their homes this year because after so much time INSIDE IT, we’re looking around and getting more ideas.
If you really want a good look at what kind of projects people are doing right now, download the 2021 Cost vs. Value report! It just came out!
Setting Your Own Expectations
Now, let’s get back to your remodel.
It’s important to set expectations. But I mean that in two ways.
The remodeling market is supposed to grow another 5% in 2021 (even after it’s much larger jump last year). After the initial shock of stay-at-home orders, no industry benefitted more.
For homeowners, that has required an adjustment in expectations. The first way for you to update yours is to set realistic timelines.
For example, it’s important to sign contracts now so you can get on a contractor’s calendar. And when you do find a great contractor, ask specifically about the timelines that they’ve seen for the delivery of materials, cabinets and appliances.
The other way you need to set expectations is with your remodeler. You need a professional with the capacity to “project manage” and keep track of changing dates from vendors. That should NOT be something you’re stuck with, and you should NEVER have questions about it.
This time has been fast-paced for remodeling firms, and only those with proactive communication policies in place will be worth your while.
What’s next?! Need to separate your home office a little more “meaningfully” from the rest of your home?
Or maybe you need a good look at 2021’s bathroom trends in plumbing and design…
Whatever you’re after, get in touch with us now!! Download our Guide to Choosing Your Perfect Contractor, too, to continue vetting that perfect partner who can carry you through this crazy time.
The times might be crazy, but your remodel shouldn’t be!!
