The past two years have been challenging for most sectors of the economy, and home improvement is no exception, beset as it has been with material shortages and soaring costs. But customer demand has certainly been a positive story, as people suddenly spending more time in their homes found plenty of reasons to call a contractor. Now, however, with inflation not receding and the economy still in flux, the question is whether those phones will continue to ring with such regularity.
By Mark Morris
Two years ago, the COVID-19 pandemic and a sudden shift to remote work drove people across the country into their homes, and they didn’t always like what they saw. So, instead of spending money on vacations or luxury items, many people chose to address long-ignored projects around the house. It was a good year for the home-improvement industry.
“Because so many people were working from home, they decided to tackle problems instead of continuing to put them off,” said Ger Ronan, president of Yankee Home Improvement in Chicopee. “The pandemic definitely changed people’s buying patterns.”
The problem today is that those patterns have continued, and in some cases, customers have had to wait for their contractor to start catching up on all the work they scheduled — while professionals are still dealing with price hikes and material shortages caused by global supply-chain issues.
“Because so many people were working from home, they decided to tackle problems instead of continuing to put them off. The pandemic definitely changed people’s buying patterns.”
Siervo Jimenez, owner of ProBuilders Home Improvement (ProBHI) in Springfield, said some of his current customers first called when the pandemic started. “We’re still finishing the projects we received from that time.”
As area contractors told BusinessWest, the projects homeowners have been asking about run the gamut from flooring and bathrooms to whole additions. “People have told us the housing market is so expensive right now, they want to make their house bigger instead of buying a new one,” Jimenez said.
Early in the pandemic, there was a time when people were nervous about having outside workers in their homes. Jake Levine, design associate with Advanced Rug and Flooring Center, said this phenomenon caused orders to decline for a time in 2020 — but it didn’t last long.
“We’ve come full circle, and now the phone hasn’t stopped ringing,” he said, noting that the most popular flooring these days is luxury vinyl planks (LVP), which click together and look like hardwood floors.
For the last two years, weather has taken a toll on Western Mass., as the amount of rain each year has increased. Fixing drainage issues for homeowners has been a big part of Kyle Rosa’s recent activity. Rosa owns Infinity Construction Corp., which handles commercial and residential site development.
“People who have been living in the same home for 20 to 30 years were suddenly finding leaks from the basement floor and concrete walls cracking from moisture,” he said. “That’s been the number-one problem we’ve been helping people solve.”
The most popular improvement project for Ronan involves people getting rid of their bathtub for a dedicated shower installation. While that’s been a strong trend for retired and older homeowners, Ronan said they are not his only customers.
“I’ve been seeing people make more practical choices. We’re seeing projects where the emphasis is less on making it beautiful and more on what’s practical.”
“Our younger customers are doing shower conversions because they just aren’t using their tubs,” he explained. “For many people, the idea of sitting and lounging in a bath just isn’t as popular as it once was.”
Ronan was able to get around some of the supply-chain issues because his production manager anticipated there might be shortages last year and ordered a considerable amount of tub and shower materials to have on hand at the warehouse.
“When most people had to wait three to six months for a shower conversion, we could do the job within a week,” he said. “We were able to circumvent many of the supply-chain issues because we had materials in stock.”
Sometimes a simple home improvement can change someone’s life. When the child of one of Yankee Home Improvement’s construction managers suffered a paralyzing accident, the old shower and tub set up at his home was no longer feasible. Before Ronan could even offer, his crews came to him with a plan to help the family.
“On their own time, our crews jumped into action and converted the bathroom to make it easier for the child to shower,” he said. “I encouraged them to take whatever materials they needed, and in short order, they got rid of the tub and installed a shower setup that would accommodate a wheelchair.”
Like many contractors, Ronan admits that finding replacement windows has been tough. He will work only with vendors who can assure they have stock, and that’s what he offers to customers.
“I will only market products that I can get,” he said. “If there is a long wait list for a product, I won’t offer it because I don’t want to inflict that on the homeowner.”
Jimenez uses a similar strategy of stocking up when items are available. When prices dropped a while back on electrical outlet boxes used for plugs and light switches, he bought them in bulk.
“These are now hard to find, and when you can, they cost two or three times more than before,” he said, adding that every cost savings makes a difference when bidding for new work. “If you have to keep increasing your estimates from project to project, you might lose out on jobs because your prices are too high.”
Not surprisingly, hardwood floors became much more expensive when lumber prices everywhere increased. While the supply of the popular LVP flooring has been steady, so are price hikes, with manufacturers increasing prices 20% to 30% in the past year.
“As a result, traditional laminate flooring is making a comeback,” Levine said. “It has remained affordable as an option that hasn’t gone up 30%.” Laminate floors are known for their durability but are prone to water damage, making them a poor choice in kitchens and bathrooms.
Ceramic flooring is one product in short supply. Levine said consumers who want the durable floor are faced with limited choices. “Many of these companies are still running at half capacity, so they are producing their most popular selections, and that’s all.”
Rising inflation on everything in the economy is causing a shift in customer attitudes when they sign up for a home improvement.
“I’ve been seeing people make more practical choices,” Ronan said. “We’re seeing projects where the emphasis is less on making it beautiful and more on what’s practical.”
“These days. I’m definitely seeing more people who are careful about spending their money.”
Rosa noted that his customers have stopped asking for add-ons. “Back when people were receiving stimulus checks, they wanted esthetic projects like retaining walls, and they would often request an extra project like hydroseeding their lawn. Now that things are getting tight, lots of people are pulling back on the extras, and I get it.”
Levine believes there are two types of customers, those who watch what they are spending and those who get what they want, no matter the price.
“These days,” he said, “I’m definitely seeing more people who are careful about spending their money.”
Up and Down
Jimenez and his crews continue to stay busy with projects from their current customers, but lately his phone is ringing less. “I have seen a decrease in calls coming from new customers,” he noted.
While he expects the commercial side of his business to remain busy, Rosa predicts that high prices will cause a slowdown in residential work as consumers delay home improvements such as re-grading their yards.
Sometimes, however, when one side of the business decreases, the other increases. Rosa may be doing less work at older homes, but he has been preparing building sites for new homes “like they are going out of style” and does not see that trend slowing down anytime soon. He believes the high prices of established homes are making new construction more desirable.
“New houses are selling before they even hit the market,” he said. “In fact, people are making offers to buy the homes we’re building while we are still on the job site.”
Overall, even in this up-and-down business environment in many sectors of the economy, home-improvement contractors remain busy and always on the lookout for what will drive new business.
“We follow the market trends,” Ronan said — however unexpectedly they may shift.