They say money doesn’t grow on trees, but over the last year it did. Lumber prices skyrocketed to historic highs during the
Will the construction industry be able to keep up with the home remodeling boom?
With all of last year’s turmoil, few people expected the home remodeling industry to grow almost 6% from the previous year.
2019 was a banner year in itself with $383 billion in construction, and 2020 is anticipated to reach $405 billion.
Four factors have spurred the growth:
- Accelerated new home prices
- Low inventory of for-sale existing homes
- Wide spread desire to get out of urban areas
- Low interest rates by the Fed
The spring 2020 economic uncertainty led to consumers of all ages and demographics desiring home renovations.
At the same time, one demographic factor is the transition of boomers and older homeowners out of their existing residence into smaller accommodations.
Potentially 11 million homeowners will be moving on or out, while 15 million younger households will be scratching for homes.
Interestingly, younger home buyers, given the choice of a condominium or an existing fixer-upper, are more apt to pursue the latter and plunge into remodeling.
Up to 40% of the kitchen and bath renovations are done by millennials and Gen-Xers. This is not news to most real estate agents today. With the current high cost of obtaining the tarnished American dream of new home ownership, young buyers are kicking the tires, or aluminum siding, for shelter.
According to the Harvard Research’s analysis of the leading indicator of remodeling activity, or LIRA, expect slower growth in 2021 but 2% quarter-over-quarter increases.
The remodeling industry had doubled in 10 years. While new home sales are strong, they are still outside the reach of many younger households
Naturally, every region is different.
The North Bay has had an enormous amount of fire replacement and earthquake repairs that are still happening. Small repairs and basic one item improvements, such as new flooring, takes a different track than larger projects requiring multiple technicians and skills. Whenever multi-tasked renovations occur, the time lines and the construction costs escalate.
At the same time, construction materials prices have exploded, and the supply lines are faltering.
Lumber has exploded 55%–63% in some areas. The timelines for construction have telescoped 20%: A project that should have taken four months is taking five months or longer.
What the market is still anxiously looking for is if COVID-19 will permanently affect our spending habits.
An important milestone in determining if a remodeling is needed is the age of the last renovation. As a general rule, 16-20 years is the life expectancy of a remodel.
As the finishes and sustainability disappears, the desire to catch up with the latest looks, materials and finishes start to wear through. The appetite to renovate one’s home is greater among younger households who are more media savvy and aware of latest trends.
One of the biggest challenges will be finding professional contractors and subcontractors.
Many small contractors have fallen on hard times and are not coming back. The Paycheck Protection Program from the CARES ACT helped 83,036 remodelers and subcontractors with their payroll obligations, but there’s no assurance that they will be back.
It becomes an open question on how many remodelers and professionals will be able to survive into 2021 with the continuing market uncertainties that include longer construction times and disrupted supply chains.
It would appear that the smaller contractors and professionals will be leaving while only long-term well-capitalized businesses with a steady source of skilled labor will survive.
Construction and renovation have been the first industrial sectors to emerge in every economic downturn or recession since World War ll.
Small builders and contractors represent the vast majority of America’s home building and remodeling industries, not big corporations. These are the businesses that will generate the jobs and raise the overall living standards in this country.
Not the government, not the unions and certainly not the retail business importing cheap goods to sell out of big box stores or deliver to your door. The home building and renovation industry is the main engine that will take the US out of this economic quagmire.
So, tell me this: Why are kitchens getting humongous and people cooking less? Why have a huge kitchen island to eat your DoorDash delivery?
What to know about renovating your kitchen during covid
Unfortunately, a kitchen renovation means two things: You need to be prepared to spend some serious cash, and you need to be patient; the wait lists for contractor availability and access to raw materials and appliances are longer than ever.
When it comes to the first scary point — the budget — Eric Shipe, owner of Bath Plus Kitchen, a kitchen and bath remodeling company based in Alexandria, Va., says to prepare yourself for sticker shock, primarily because of the current high cost of lumber and building materials. Expect to spend $65,000 to $90,000 “if you’re replacing all materials in a 200-square-foot kitchen, L-shape with an island,” he says. A luxury kitchen will range from $110,000 to $150,000 or higher.
Claire Staszak, principal designer and owner of Centered by Design, a Chicago-based design firm with a specialization in kitchen design, says that depending on where you live and your kitchen’s size, “the average renovation with high-end appliances and semi-custom cabinets” starts at $100,000. Of that budget, both Shipe and Staszak say the bulk of it — about 40 percent — will go toward cabinets, with appliances as the second-biggest line item.
If these estimates are out of your price range, Shipe says, think about taking out a loan for your project. “Even if you have the cash, with rates so low, why not consider financing?” He continues: “The number one regret is not spending enough to get what you want. Unfortunately, most people don’t realize they can finance until after they’ve spent tens of thousands on a kitchen remodel.” His advice: If you want a kitchen you’ll love and one that will last, spend the money to get you there.
As for hiring the right people, Staszak says, vet everyone with referrals, and see their work in person, either in a showroom or a former client’s home. “The execution of your project is what is most important,” she says, “so invest in the best contractor, designer, cabinet company, etcetera, that you can or feel comfortable with.” And Shipe cautions against using anyone who is too eager. “Demand is at an all-time high,” he says. “By the time a crew is available to start your project, materials should be, too. If someone is telling you they can start your kitchen remodel in the next one to three weeks, that’s a red flag.”
When it comes to selecting the nuts and bolts of a kitchen remodel, both Shipe and Staszak shared some of their top recommendations.
Countertops: Both like quartzite, because it’s a natural stone with the look of high-end marble, but it has the durability and heat and stain resistance of granite. Shipe also says to consider either quartz or Dekton because of their practicality; both are manufactured, rather than naturally occurring, and require little care. If you end up choosing a natural stone, Staszak says, make sure you see a full slab, not just a small sample, because the scale of the pattern or veining can vary.
Flooring: Both experts say that wide-plank white oak is the choice du jour. Staszak says it takes a variety of stains well. But Shipe cautions that because of its high demand, prices have gone up. He suggests considering luxury vinyl planks, because they’re waterproof and half the price.
Appliances: Shipe likes the matte white models from GE’s Café brand, but he also uses luxury brands, such as Sub-Zero, Wolf and Viking. Staszak leans toward Thermador, GE’s Monogram and Sub-Zero. For lower-priced models, she recommends Samsung for refrigeration and Bosch for dishwashers, as well as the Café line.
Because appliances play such a big role in the design process, Staszak tries to have clients commit to models before she begins drawing up the kitchen. The clients’ ultimate choices are those that meet their cooking, space and installation needs. Whatever you end up selecting, Staszak says, ensure your cabinetmaker has all of your appliance choices and measurements before cabinet production.
Cabinetry: Shipe says to consider more affordable laminate cabinets, especially given long lead times for painted and stained cabinetry. “Laminate cabinet technology has come a long way,” he notes, “and many include features such as anti-fingerprint and antimicrobial.” Shipe also recommends frameless cabinetry, which can give you 5 to 10 percent more storage space. And he says to think twice before installing trendy floating shelves. “They are a commitment. Your challenges are dust and organization,” he says. “We recommend not cramming too much onto floating shelves. If you’re using them for everyday items, such as plates, bowls or cups, it may end up looking too cluttered.”
It’s not surprising that both Shipe and Staszak emphasize the importance of working with a skilled kitchen designer or architect to lay out your cabinets, because a large portion of your budget goes to their fabrication. Staszak sees a lot of awkward cabinet designs that don’t seem well-planned, useful or beautiful. “Good cabinet design comes down to tiny quarter-inch details,” she says.
Layout: A skilled designer will help you think about how the space meets your needs. Take, for example, the case of an island design. Before beginning, Shipe would ask his clients if, when hosting, they want a large, open island where everyone can sit and be part of the action, or an island that hides the kitchen mess but provides great storage. Depending on the answer, he provides a design in which the island top is all one level, so the kitchen is open and inviting, or has a raised bar and a tall storage area to hide the kitchen mess. A designer should listen to your needs and be able to translate them to the design.
Trends: Lastly, both Shipe and Staszak are cautious of kitchen trends. Although they realize that Pinterest and Instagram are great resources for gathering ideas, picking a timeless design, especially when making such a big investment, is more prudent. Staszak says that if you want a trendy note in your kitchen, then focus on lighting and hardware; they are the easiest to swap out and experiment with. And whatever you do, Staszak says, gather samples of all your materials, look at them together before you order and pick your paint color last.
Mayhew, a “Today” show style expert and former magazine editor, is the author of “Flip! for Decorating.”
Shaking off a dark winter with a spring cleaning, refresh
A spring cleanup and décor refresh have always been able to lift moods. But after this long pandemic winter, there’s special satisfaction in clutter removal, extra joy in being creative, particular pleasure in making a space even more your own.
“This time of year, I can often feel buried after so much time indoors, and with many of us working from home, this is even more crucial,” says designer Mel Bean in Tulsa, Oklahoma.
Or as New York-based designer Thom Filicia puts it: “Be brave. The new year is a chance to create spaces that allow you to live your most beautiful life.”
Some suggestions from the experts on bringing a sense of harmony and happiness home this spring:
A GOOD CLEAR-OUT
“`Bright and light’ is my motto, and when the days get warmer, I can’t wait to purge and donate some things,” says New York designer Michael Wood. He gives to Housing Works, a New York City non-profit fighting AIDS and homelessness.
Wood takes the change of season as an opportunity to get a professional firm in to deep clean.
“Every piece of furniture is lifted and cleaned by the crew — all lighting fixtures, fans, walls, blinds/drapery and ceilings are wiped,” he says. “They clean the outside, inside and behind all appliances, inside closets, shelving and cabinetry, all windows inside and out. Everything feels new again!”
Hiring pros might not be doable for all of us, however. Thankfully, cleaning can be free therapy.
Organizing expert Marie Kondo says that visualizing what a happy home would look like to you is a good first move on the de-cluttering, cleaning journey.
“Think about what kind of house you want to live in, and how you want to live in it,” she says. “When you imagine your ideal lifestyle, you are really clarifying why you want to tidy and envisioning your best life. The tidying process represents a turning point.”
Decluttering might spark some new ideas for old belongings, says Lance Thomas of Thomas Guy Interiors in Lake Charles, Louisiana.
“Heirlooms are a great way to accessorize and bring happiness into a home. Those ancient trinkets and doodads found while spring cleaning could make for a wonderful coffee table conversation piece,” he says. “There’s something special about preserving memories and respecting history that feeds the soul.”
Not up for anything big? After you’ve done a declutter, reward yourself by bringing home some green.
“Plants are known to boost mood and productivity,” says designer Jay Jeffers. “Add a floor plant in ample natural light to elevate your space, and put smaller plants where you spend most of your time, like your kitchen or your desk.”
There are lots of easy-care options, like succulents (including aloe and jade plants) and pothos. Or try cut flowers.
“Investing in a pretty vase and making a commitment to fresh flowers is a great way to bring happy into your space,” says Houston designer Mary Patton. “Even if you’re Instacarting, you can have inexpensive flowers delivered. Flower arranging is an easy, creative activity.”
Filicia advises paying attention to the pieces you touch most every day. “Your home should not only be a place where you feel inspired and energized, but also where you can kick back and relax. Create an environment that allows you to recharge,” he says.
“Bedding, pillows and throws create those welcoming environments.”
Paint or paper a wall, replace a rug, or reupholster a chair, he suggests.
Color is a simple way to create an upbeat feel, says John Cialone of Tom Stringer Design Partners in Chicago. The firm recently completed a Palm Springs, California, project where they brought in a vibrant kiwi green. Cialone also likes coral on walls or furniture for “giving you a healthy glow.”
Changing finishes or buying larger furniture costs more, but packs a punch.
Jeffers suggests drawing inspiration from your favorite destinations. “Think about the places where you feel happiest. Whether it’s a beach with tranquil blue water and warm white sand, or a cozy cabin surrounded by evergreen trees, incorporating design elements from your most-loved destinations will mentally bring you back,” he says.
At-home gyms have been one of his most requested additions this year. Whether you set up a few pieces of equipment or just some mats and pillows, that private oasis can pay off in both your fitness level and your mindset, Jeffers says.
Changing the finish or color of kitchen cabinets can be a big job, but the payoff, Cialone says, is also big.
As the pandemic waged on, Lisa and Peter Kinsman of Westchester County, New York, got fed up with their kitchen’s dark cherry cabinetry and black countertops. Inspired by a photo Lisa saw of a kitchen designed by Studio McGee, the couple chose a creamy gray paint to cover the cabinets, and changed out the counters for crisp white Silestone. The updates brought more light into the smallish, back-of-the-house space and improved the vibe in many ways, Lisa said.
“The light, definitely, but we’re surprised how much bigger it looks,” she says. “Hard to say if that’s why I find it more pleasant, or if it’s because it looks so much more current.”
Philadelphia-based interiors firm Marguerite Rodgers added a playful, cheery red pocket door to a recent kids’ room project on the Jersey Shore.
“The pop of color really ties the space together,” says designer Kaitlyn Murphy. “You can easily refresh existing millwork by adding a wallcovering, textile or a fun paint color.”
Popular 2021 home upgrades — and how to pay for them
Staying at home during the pandemic has changed the way homeowners renovate, but not always in ways you might expect.
You could assume, for example, that homeowners are desperate for privacy and therefore adding more walls.
But interior designer Max Humphrey says rumors of the open floor plan’s death, which bubble up every year, are exaggerated.
“I think middle America still loves their open floor plans,” says Humphrey, who is based in Portland, Oregon. “Designers are talking about how open floor plans are over, but believe me, they’re not.”
Instead, homeowners are creating spaces they’d want to visit if they didn’t live there. Home kitchens have replaced restaurants, and your favorite outdoor bar is now your patio.
Many homeowners paid for their upgrades with savings last year, according to NerdWallet’s 2020 Home Improvement Report. Indeed, if the economic impact of the pandemic hasn’t hit your own finances, cash is the cheapest way to cover home renovations.
But there are also affordable financing options, including cash-out refinancing and personal loans, for those who don’t have or want to use savings.
Here are projects interior designers expect to see more of as the pandemic stretches into 2021, plus financing options to make them a reality.
Whole house renovations
Stephanie Sullivan is busier now than at any time since she became a full-time interior designer in 2014.
Her clients are seeing again the things in their homes they wanted to change when they bought the house but stayed busy enough over the years to ignore.
“It’s amazing how we don’t notice stuff until we’re stuck at home going, ‘hmm, really,’” she says. “So they’ve been walking past it for years, and now everybody’s home and they’re going, ‘Wait, I can’t do this.’”
A homeowner asking her to redesign the entire house is common these days, says Sullivan, who is based in Austin, Texas.
She says multiple clients in the last year have said, “I just need you to start at the front door.”
Fully remodeling most or all of the rooms in your house is likely an expensive endeavor.
If your project is $50,000 or more, certified financial planner Sarah Ponder recommends a cash-out refinance, which involves replacing your existing mortgage with a larger one and using the extra money to renovate.
Cash-out refinance is a good option only if you have enough home equity to match the project cost and if you get a low interest rate — a real possibility given today’s low mortgage rates, says Ponder, whose company, Real Estate Wealth Planning, is based near Austin.
It’ll take patience, too. The refinance process used to take about a month, Ponder says, but lately, it can take two or three months.
Another common request Sullivan says she receives from homeowners: Turn a master bathroom into an at-home spa.
“Since they can’t go to the spa, they’re creating spa retreats in their bathrooms,” she says.
They’re redoing their kitchens as places to connect with family, she says, but they also want their own getaway, even if it’s just upstairs.
Homeowners are also transforming basements and spare rooms into home offices and study rooms, or gyms and playrooms, Humphrey says.
He says his clients are looking for ways to sprawl out.
For midsized projects like one- or two-room renovations, refinancing your mortgage may not be worth the time and effort.
San Antonio-based CFP Tess Downing says a personal loan could work for projects around $20,000. These loans don’t use your home as collateral, and qualifying is based on your creditworthiness and finances. Good credit and little existing debt are must-haves to get a low rate.
Consumers who qualified for a personal loan in 2020 with excellent credit (720 or higher FICO) typically were approved for rates between 10.7% and 12.5%, according to NerdWallet marketplace data.
There are also affordable ways to get a fresh look in your home on a budget.
Replacing light fixtures can make a big difference, says Humphrey, and first-timers can get help from YouTube.
“It’s things that you notice every day, you know, that’s the light in your house,” he says. “Even as a renter, I would swap light fixtures.”
Homeowners can also add a roll of stick-on wallpaper, he says, or a fresh coat of paint. Even new towels, lightbulbs and bedsheets can change the look of a room.
Smaller projects you do on your own, like updating your home office or adding some new shelving, can be done on a budget.
If the cost of your project is below $10,000, a zero-interest credit could be a good pick, Ponder says. If you can pay the balance during the card’s promotional period (often 12 to 18 months) you’ll finish your project interest-free.
More traditional credit cards and store rewards cards can also help you cover purchases on these projects, especially if you have a card with a hardware or furniture store. Be sure you can pay the balance in full each month to avoid interest.
It’s probably not worth your time and money to go all-out renovating a home you’re going to sell in a couple of years because you won’t make that money back, Humphrey says.
He cautions his clients against overpersonalizing a home they don’t plan to stay in long-term.
“I don’t love to think about resale when I’m designing for somebody, but the pandemic isn’t going to be forever,” he says. “So I do encourage people to think a little bit about resale.”
But for as long as home remains a restaurant, spa, gym, school and office, go ahead and make some changes you can afford just because they make you happy.