When will material prices come back down, should I wait ??
That was the question asked of homeowners and remodelers this past year and the answer is revealing. Half of the homeowners (50%) expected prices to go down, while only 1% of remodelers shared that expectation. In other words, 99% of remodelers’ expected costs would rise. So, what do they know that homeowners don’t know? They know pigs can’t fly.
Prices are actually going down—for some.
“Prices have already softened in some building materials commodity markets and you are starting to see that reflected in the cost of dimensional lumber at the big box stores beginning to drop back into the realm of almost reasonable,” explains Kenny Craig, owner of Exterior Energy Consultants of Kansas City.
“However,” Craig explains further, “Unlike with new homes, which may see a drop in prices, most remodelers aren’t heavy users of those materials, and so, logically, that’s not what’s been driving the steadily increasing cost of a remodel over the past ten years.”
So why does the cost of exterior remodeling continue to rise?
It’s a combination of things; inflation, labor, demand, and the general cost of doing business in an ever more complex world. Add it all up, throw in a major ongoing disruption in the supply chain, and you’ve got siding and window projects that 5 years ago cost $15,000 now costing $30,000.
“Think about it,” says Craig, “Outside of another economic depression, people aren’t taking pay cuts to enter the job market, they are getting sign-on bonuses to Flip hamburgers! In 38 years in business, we have yet to see pricing come down in siding, roofing, windows, doors, or guttering, which are all labor-intensive products we use daily in exterior remodeling.”
“It’s a common refrain from homeowners. They call and start out by saying they are just a small window needing replaced, nothing fancy. To which we reply, size doesn’t really affect pricing as much as you might think. Today’s replacement window price range can be between $550.00 to $1250.00 a piece depending on the quality of materials and scope. There’s a gasp and then the sound of a body hitting the floor,” Craig explains with a wry smile. The rest of the conversation goes something like this:
“But how can that be? My windows are just small little, tiny itsy-bitsy windows, they protest.” And getting smaller with every passing minute.
“I know, mam, but we don’t have a tiny crew to do the work; I can’t send out half a person to do a half size window. In most cases, it takes just about the same amount of time to do a small window as a large one. There’s the in-home consultant, the office admin, the project manager, the warehouse/delivery, the carpenter/installer, the, well, you get the idea,” explains Craig.
Here might be some better-suited questions…
If, generally speaking, remodeling will never cost less, and it won’t, the better question(s) are:
- How much more will it cost each year that I wait?
- What do I risk losing while I’m waiting?
- Where can I go to get the most for my precious money?
The answer to the first question is a bit tricky. You can look at the last 12 years historically and easily see a 5-10% increase annually, depending on the year. “Lately, however,” says Craig, that seems to have accelerated for obvious reasons. And so he would advise homeowners to calculate a 15-20% increase in prices in the next 12-18 months, and if supplier pricing goes the other way, everyone will be happy.”
The second question is highly subjective but pretty straightforward. What’s at stake in waiting is far more than ROI; it’s about the time and experience that you can never get back…Craig explains “often people go years with wishes and desires only to fix their home up to sell it when they could have enjoyed the energy savings, and aesthetic benefits themselves had they done years earlier”
The third question is much simpler. Go with an established company with decades of trade partner relationships. That’s where labor increases are most held at bay. Better yet, look for a company that has a long history with its employees and crews and isn’t at the mercy of outside suppliers.
The best news of all…
The overall cost of an exterior remodel is still primarily up to the selections of the homeowner. You really do control the budget in the decisions you make. Our job at EEC is to help you make the best possible option to achieve your goal of a more beautiful, functional, and durable home while staying within your budget—not just different—but better.