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. The Escape Home’s Nancy Trejos has the scoop.
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.
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 percent of builders surveyed reported shortages of appliances, framing lumber and wood panels.
- Lumber alone seems to be causing the most consternation. In 2018, 31 percent of builders reported a shortage of framing lumber, a record at the time. Now, 94 percent of builders say they are scrambling to find lumber.
- Exactly 90 percent said there was a shortage of plywood, and 87 percent 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 percent 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.
Paul Emrath, vice president of surveys and housing policy research at the National Association of Home Builders, calls these unprecedented times for the industry.
“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.
“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 percent 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.
IN THE NEWS
Second home buyers are heading to Europe
With much of the continent recently reopened to travelers, some are looking to stay for a while. Local real estate companies throughout Europe have reported an uptick in interest from Americans looking to buy vacation homes, particularly in Italy, France and Portugal. And, compared to the state of domestic real estate, there are deals to be had: in Venice, real estate prices are down more than 4%, while in the Spanish resort town of Marbella, prices have fallen more than 10%.
See more: Second homes around the world for less than $230k
New York is back, baby
At least that’s what the real estate community is saying: “We’re coming off a record number of signed contracts in the second quarter, and what’s driving that is buyers are seeing value. They’re sensing opportunity, and there’s a real sense of hope for an economic boom in September when it opens up,” broker Christopher Kromer told CNBC. Demand is especially high on the luxury side of things. According to Mansion Global, 163 luxury homes priced at $10 million or more have gone into contract, a 426% increase from the same period last year. That being said, inventory is still high, meaning there are deals to be had.
“Migration mania” and those who get left behind
When the pandemic hit and more than 20 million Americans lost their jobs in the first two months alone, many predicted the housing market would collapse. Instead, it drastically transformed, driven by a wave of people who could suddenly work from anywhere, and thus chose to leave expensive cities like San Francisco and New York for lower cost areas. This trend, plus a limited inventory, caused home prices to rise — they’ve gone up 24% nationally since May of 2020. Ali Wolf, chief economist for Zonda, penned an op-ed for the New York Times about how the relocation buyers will fundamentally change the housing market, causing a permanent shift toward more expensive housing that unless addressed, will leave local residents priced out.
We told you so: See our previous story on this; “What we’re doing to teachers and firefighters“
BY THE NUMBERS
86%
That’s how much the cost of renting a car has gone up during this crazy summer of travel. Additionally, the price of a hotel room is up 36%, airfares have been going up at a rate of about 10% per week and gas is averaging $3.14 a gallon — the most expensive it’s been since 2014.
PRODUCTS WE LOVE
Cold spells, heavy rain and heat waves — it’s not been the summer weather many of us were hoping for. Here’s a few accessories to help you make the most of it, regardless of the forecast:
This easy-to-fold, waterproof blanket is the perfect companion for those chilly beach days.
This compact, windproof, reversible travel umbrella is a lifesaver, and has the wildly positive reviews to prove it.
We love this personal fan: it’s cute and compact, rechargeable and has a flashlight feature, making it the perfect travel accessory.
This waterproof hooded windbreaker comes in 19 colors and folds into a compact travel pouch.
ON THE MARKET
This three-bedroom, four-bathroom townhome, located in the heart of Savannah, Georgia, featured elegant details from a “bygone era,” like impressive hardwood flooring, ornamental moldings and custom built-ins.
The house, one of the only ADA compliant buildings in the Historic District, boasts an elevator, a gas fireplace built from historical Savannah grey brick and top-of-the-line kitchen appliances, among many other features.
It is listed at $1.8 million.
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