Summer is the perfect time for home renovation due to its longer daylight hours and favorable weather conditions. However, certain factors need to be weighed up beyond just the climate, such as the right time for renovations and understanding how supply and demand can affect your renovation’s cost and timeline.
PANDEMIC’S EFFECT ON RENOVATIONS
In recent years, the pandemic has put a strain on home improvement endeavors as companies struggle with their project backlogs. More than 44% of U.S. home remodeling plans have been put on hold due to material shortages and inflated costs, as per data from the market research firm Cardify.ai.
Steve Cunningham, CEO of Cunningham Contracting and chairman of the National Association of Home Builders’ (NAHB) Remodelers Council, reports months-long delays in his projects owing to material scarcity and labor shortages, forcing many homeowners to deliberate between postponing their planned renovations to the following year.
LUMBER’S COST IMPACT
Lumber, a main component in construction projects, is largely responsible for these delays. Its costs have significantly increased in the past year and economists predict that this might continue for some time. Between March 2020 and May 2021, the lumber price per thousand board feet rose from $303.40 to $1,607.50. This then reduced to $741 in July. A 45% monthly reduction in lumber costs, the steepest drop on record since 1978, was recorded by Market Insider, despite it having impacted my personal renovation plans lately.
I had purchased a ranch with an unfinished basement last year with aspirational plans to extend the living area by completing the basement this summer. However, the contractor’s whopping quote of $25,000 compelled me to abandon this project due to budget constraints.
WHY ARE LUMBER PRICES REDUCING?
Several factors account for the ongoing reduction in lumber wholesale prices. As the analyst Dustin Jalbert from Fastmarkets explains, the pandemic’s lessening impact has permitted the reopening of sawmills and resulted in some remote workers returning to their workplaces. With these changes, some considerations for delaying renovations have emerged.
A further drop in lumber prices is anticipated, and homeowners are yet to experience these cost savings. Waiting a few months to begin renovations could allow you to save money and avoid unnecessary debt, alleviating financial stress. If possible, it can even be beneficial to hold back your renovation for a year as this enables further savings or investment in a high-yield account for accruing interest.
Despite growing vaccination rates, the COVID-19 threat persists. With coronavirus variants proliferating, it could be more comfortable to delay renovations and avoid having contractors in your home. Moreover, this postponement will provide you with ample time to deliberate over your renovation plans, sidestep impulsive decisions and ensure that your plans align with your budget.
CONCLUSION
While there are many compelling reasons to undertake home renovation, such as enhancing property value and modernizing fixtures, potential pitfalls exist. Fully comprehending supply and demand is crucial in determining renovation costs. While the most optimal time for renovations might not be when material costs are at their lowest, planning in advance can allow for procuring materials when prices are more affordable.
Deciding to proceed with a home renovation can be a fraught decision, and it’s crucial to prepare yourself for potential overruns on both time and cost, particularly amid a pandemic. If the project exceeds expectations, this will lead to a feeling of elation – so it’s crucial to plan wisely.
