Undertaking a home renovation is challenging under normal circumstances. Home renovations in 2021, with COVID-19 restrictions, skyrocketing lumber prices, and an ever-expanding real estate bubble, can seem downright impossible.
Home renovations made simple
But don’t let the new normal prevent you from achieving the home of your dreams. Even in the current market, it is possible to complete a major home renovation. To ensure the success of a home improvement project, you’ll need to gain an understanding of renovation trends, find a qualified professional contractor, and plan carefully.
Why is everyone planning a home renovation?
Demand for home renovations is higher than ever before. Statistics Canada reported an increase in residential construction projects in 2020, and over half of Canadian ReMax survey respondents stated that they had already completed, or were planning to complete, a home renovation project in 2021.
The reason behind the increased home renovations in Canada? Many people are spending more time inside their house, working remotely and saving money that would be spent on restaurants, travel, and entertainment in less trying times. The terrible backsplash on the wall behind the stove is much harder to tolerate when the kitchen table has become the new office. Memories are being made at home this year, and vacation money is now earmarked for a basement renovation and a skylight installation.
These factors are compounded by an increasingly competitive real estate market. Moving into a bigger house to accommodate the new stay-at-home lifestyle is not an option for most homeowners. Home prices are set to rise by 16.5% by the end of 2021, so many would-be sellers are opting to stay put and renovate.
Breaking down the major renovation trends of 2021
Trends in the home remodeling industry were hard to keep up with before the additional challenges of COVID-19 restrictions for on-site personnel, increases in the cost of construction, and projects put on hold due to supply chain disruptions. Now, lumber costs have increased by 70%, the average basement renovation has gone up by $20,000 since last year, and timely furniture delivery is a distant dream. Understanding the real reasons behind seemingly arbitrary industry trends is crucial for getting ahead of the curve in a competitive home renovation market. Successful renovation planning in 2021 will take into account the four major factors we outline below.
Why has the cost of lumber gone up so much?
The cost per square foot of lumber is increasing rapidly for home renovations that require wood frames and flooring. Mills in Canada are operating at capacity to compensate for shutdowns earlier in the pandemic and to meet the increased demand for lumber occasioned by the spike in construction and home renovation projects. Logs are abundant, but processing equipment is not; heavy machinery used in the lumber business is now booked for years in advance. Current lumber prices in Canada are doubling in the space of a week. Experts predict that lumber prices will continue to rise throughout 2021.
So, what about those plans to install a new deck for socially distant summer barbecues? Your renovation planning may need to include the use of other renovation materials, like weather-resistant vinyl planking. Creativity, flexibility, and judicious use of existing structures will carry the day when confronting an unfriendly lumber price forecast.
Contractors are in high demand.
Many contractors are still working on projects signed last year, playing catch-up after a series of lockdowns and supply chain disruptions. Already overscheduled, they are hard-pressed to take on new clients. While in previous years contractors were able to begin work on a project within days of signing, now they may take weeks or months to break ground on a new home renovation. Like many professionals in the home remodeling industry, contractors are overbooked and in higher demand than ever before. Hiring a contractor is a waiting game in today’s market.
Planning your project ahead and speaking with a variety of
contractors are important to the success and timelines of your project. Smart Reno can help you find contractors in your area that are right for your project.
Materials are scarce.
The supply chain for building materials was heavily impacted by the pandemic. Factory closures and production delays limited the availability of appliances, and supply chain disruptions have impacted the availability of renovation materials. Low supply and high demand have driven up construction costs and increased the time required to complete home renovations in 2021. Delivery times for manufactured goods like furniture, laundry machines, and outdoor cooking stations are variable at best. Successful home renovators will have second and third options in mind when ordering appliances in case the delivery of their first choice falls through.
Completion timelines are extended—sometimes indefinitely.
High demand for renovation materials and professionals, combined with limited supplies and personnel, means that home renovations are taking much longer to complete. Window and door installation now takes six to twelve months, and even pre-fabricated IKEA kitchens can take months to be delivered. A major project like a basement renovation or a full kitchen remodel may even be delayed by an increase in processing times for building permits.
How can homeowners meet the challenges posed by COVID-19 home renovations?
Don’t rush the process. The home renovation market may be volatile this year, but the principles for success remain the same. Resist the temptation to hire the first contractor who becomes available – don’t skip the due diligence. Finding the right contractor and obtaining the best materials for the job will take much longer these days. Now more than ever, your home is your sanctuary, and a well-executed remodel is worth the wait. Follow these three simple steps for a successful home improvement project:
Find a verified and qualified contractor.
Use Smart Reno’s project planning tool to outline the details of your project. You will receive around three renovation quotes for vetted contractors in your area. Compare these quotes and choose a professional based on fair pricing and a good reputation. Hiring the right contractor is the key to success in this turbulent renovation market.
Protect your money.
Once you determine a realistic renovation budget, take steps to avoid going over it. Initial renovation quotes provided by contractors are not set in stone, and the additional renovation costs may not come to light until midway through a remodel. Before you sign a contract, make sure that it covers what will happen if the cost of renovation materials rises before your project is complete. This will provide some protection against market fluctuations.
Due to potential timeline delays, tie payments to project milestones rather than to specific dates. Otherwise, you may risk paying for work that has not even begun.
Good planning is always essential for a successful home renovation project. If a basement home office is in your renovation plans with a wall of greenery behind your new desk, think about the lighting installations that will be required to keep those plants alive.
How can you calculate renovation costs when materials and contractor availability are plagued with uncertainties? Develop a budget with current renovation costs in mind, but always keep in mind that these costs may increase. A realistic outlook and a firm attitude toward money matters are essential in this market.
Key takeaways for your 2021 home renovation
COVID-19 has made an unprecedented impact on the housing market and the home remodeling industry. More people are renovating their homes than ever before as they strive to improve their quality of life while physical distancing timelines continue to extend. The increases in lumber costs, high demand for contractors, and supply chain disruptions will continue to affect renovation trends for years to come.
COVID-19 can render your construction costs and completion timeline unpredictable, but it should not alter your vision for your home. With clear goals and contingency plans, your home renovation will go smoothly—even in 2021.
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This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While the information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author(s) as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or its affiliates.