Who hasn’t written about all the different effects of COVID? In the construction industry COVID is used deceptively as an excuse, truthfully as an excuse, misunderstood and misquoted. My friend and past consultant of Kennedy Homes, George Casey sends me a newsletter every Monday with some insightful articles he pulls from various well know sources. In a recent article by Franklin Templeton’s Fixed Income CIO Sonal Desai, she writes we have been blinded from the science by misinformation, gullibility of many sectors of America and misquotations. I must admit I have felt that way from the beginning. We in the construction industry have suffered real consequences from COVID under true situations. Here are some examples of true-life consequences effecting my 50-unit town home project:
- 1. Truss manufactures losing up to 25% of their work force at anyone time because workers in close proximity are quarantined for at least 14 days.
- 2. Inability to get paver bricks for basically the same reason.
- 3. Appliance shortages due to worker shortage caused by COVID
The same can be said for roof tiles, concrete, labor and insulation. This happened immediately after COVID was discovered in February of 2020. Since then with pre-cautions, warmer weather and vaccinations the labor side has rebounded in most every manufacturing venue.
Shortages left in the wake of COVID. With half of the economy almost completely shut down – cruise operators, hotels, airlines, restaurants, all pro sports and anything to do with crowds it came as a complete surprise that the construction and housing industry began to boom. Demand was fueled by people leaving poorly run freedom restricted states in the north and out west and a pent-up demand as limited inventory was quickly absorbed. The construction industry was caught napping as home selling in warmer conservatively run states began one of the greatest most intense real estate revivals since 2003-2005. The earlier shortages created during early COVID have been exacerbated by rocket trajectory demand in housing. To overcome delays and shortages we are scheduling many trades and their materials out 7-12 weeks. This week our project started like this:
Monday– no toilets, no insulation, ordered pavers 10 weeks ahead
Tuesday– called around for alternative toilets, got word of electrical box shortages, no AC equipment
Wednesday– Visited new paint manufacturer because of Sherwin Williams plant freeze 6 weeks ago
Thursday– AC equipment delivery confirmed, switched paint brands, fired countertop company for using
COVID as an excuse to delay tops to 4 weeks after template. Interviewed 3 countertop people.
Friday-Toilet solution found, hired new countertop sub, closed on furnished model, electric boxes done.
This is the new norm in construction-daily/ weekly “crisis management.” In my 45 years in real estate development I cannot remember a more uncertain time involving nearly every trade. COVID left its mark and we are all now paying for it. Here you can read more real data about COVID effects
Stephen Gravett has been a real estate developer for over 45 years and was most recently CEO of Kennedy Homes for the past 11 years and is still CEO of Kennedy Development Partners (KDP) and full time Director of Operations for 5 Star Developers. He is also a state licensed broker and since 1980 a State licensed General Contractor Unlimited. He flew B-52’s in the US Air Force during the Vietnam war.