With widespread supply chain disruptions, 2021 hasn’t been a year anyone in Kida’s business would call ordinary.
An Evanston lumberyard owner stockpiled the materials to build about 15 houses. A remodeling contractor pieced together leftover materials from past jobs to update a Calumet Heights home so the family of its elderly owner could get it on the market. A builder ordered $150,000 worth of windows for a new house in Highland Park months earlier in the construction process than he normally would even think about it. An Arlington Heights handyman got used to having to drive around to all the big box hardware stores to find enough matching parts to complete his clients’ jobs.
“Balancing inventory has never been this difficult,” says Bob Fisher, third-generation owner of Evanston Lumber. “We tell our customers that lead times have gone from reasonable to outrageous.”
Fisher, who also owns Marvin Window Gallery in Lake Bluff, says order times for doors and windows have gone from around 3 to 4 weeks to “16 or 20 weeks, maybe more.”
Also growing fast: prices. Fisher said some window lines have had “five price increases at 5% each since 2019. Normally it would be about 3.5%, once a year.”
In a recent article in the MIT Sloan Management Review, transportation scholar Yossi Sheffi explains that supply chain shortages resulted from manufacturers cutting back, either because of reduced demand for their products or because of COVID-era work rules, just ahead of a surge in demand for many consumer products, including those that improve the home, pushed by stimulative cheap money.
“They made less when they didn’t know people would suddenly demand more, and now nobody can catch up,” says Jonathan Rubenstein, whose Highland Park remodeling and building firm is called Jar Corp. As a result, “everything’s more expensive and everything’s hard to get,” he said.
On a large-scale remodel like the ones Jar specializes in, the homeowner is expecting a package of fine finishes and materials. Rubenstein draws up a proposal and, in ordinary times, the client might take a few weeks to go over it before accepting.
That used to be OK, Rubenstein says, because “my vendors would hold the pricing they gave me for anywhere from 30 days to 12 months.” In their pinched state now, his vendors “will hold their prices for seven days. That price might go up before (the homeowner client) opens my email.”
Kida says that in mid-October, a well-known cabinet brand—which Kida wouldn’t name—announced a 9% price increase that would take effect Nov. 1.
“Normally the cabinet companies would give us 60 to 90 days’ notice, and we’d wrap up our projects,” Kida says. “This time, it’s ‘Boom, done, we’re going up.’”
Some repairs require a near-instantaneous turnaround. When a water heater fails, “you need to have a new one the next day, maybe two days,” says Stephen Adamitis, president of American Weathermakers, a Northbrook heating and air conditioning firm. Typically, Weathermakers would have two 50-gallon water heaters in its supply warehouse and reorder each time one leaves the building to be installed in a client’s house.
Because of the supply chain slowdown, Adamitis says, he’s been keeping as many as eight 50-gallon heaters in the warehouse, just in case.
Customers have largely been willing to go along with longer wait times and higher prices, these industry sources all say. They attribute that to two factors: The supply chain has been a high-profile problem, so it’s on homeowners’ radar screens and doesn’t surprise them, and most people don’t see the prices coming back down anytime soon.
Homeowners “have been understanding,” says Jack Casey, an Arlington Heights handyman who calls his firm Handy Jacks. “They know what’s going on out there. They’ve seen the container ships parked in the ocean (near) Los Angeles.”
When he tells them a sheet of plywood that he used to be able to get for $15 is now $48 and he’ll need seven sheets for their bathroom, as he did for one recent client, “They know why,” Casey says.