Long Waits Expected for Post-Hurricane Home Repairs

By Patrick Clark | October 13, 2016

There will be plenty of large-scale reconstruction to do in the wake of Hurricane Matthew, which has been blamed for dozens of deaths since it made its first U.S. landfall Friday and is still causing catastrophic flooding throughout eastern North Carolina.

But in the short term, it’s also creating demand for more minor home repairs, at a time when a contractor shortage has already meant longer waits for homeowners.

On Monday, requests for installation of new windows were up 133 percent in Myrtle Beach, S.C., compared with the same day last year, according to HomeAdvisor, a website that connects homeowners with service professionals. Requests for repair work on tile roofs were up 120 percent in Savannah, Ga., and work orders for repairs on portable generators increased 241 percent in Jacksonville.

“My expectation is that we’re going to see some major labor bottlenecks,” said Brad Hunter, chief economist at HomeAdvisor. “We were already seeing labor shortages before the storm, and when there’s a spike in demand, labor becomes a bigger problem.”

The storm may have caused about $10 billion in damage, according to a recent estimate by Goldman Sachs—a fraction of the worst-case estimates made last week as the storm neared the Florida coast, but still a sum that calls to mind the wholesale rebuilding of flooded houses and neighborhoods.

Over the past three decades, spending on home renovations in response to natural disasters averaged about $10 billion per year, according to Todd Tomalak, a vice president at John Burns Real Estate Consulting. But the past three years have been easier on homeowners, with disaster-based renovation spending coming in around $7 billion a year.

Either figure is a small fraction of total spending on home renovations, which will likely approach $300 billion this year.

 Nichols, SC, USA--Floodwater surrounds homes in Nichols, South Carolina following Hurricane Matthew. FEMA Photo by Dominick Del Vecchio - Oct 12, 2016

Nichols, SC, USA–Floodwater surrounds homes in Nichols, South Carolina. FEMA Photo by Dominick Del Vecchio – Oct 12, 2016

New demand for home repairs in the wake of Hurricane Matthew will come at a moment when a strong housing market has boosted demand for renovations, as sellers seek to make their homes more attractive before listing them and buyers seek to customize them before moving in.

Granted, clearing debris or fixing a generator requires a different skill set from hanging drywall or putting a roof on a house—but demand created by the hurricane could also overlap with labor shortages facing builders of new homes.

Before the hurricane, a shortage of qualified workers was already extending the average time it takes to build a new home in Florida by about two weeks, according to a September survey conducted by Tomalak’s firm. According to an Orlando-area builder interviewed for the survey, the cost of hiring workers to frame a house rose 60 percent from February through August.

“Labor costs should go way up, and we could see several months of really high labor costs and higher [work] cycle times,” said Tomalak. “Eventually, more labor gets attracted from other areas.”

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