Families closing on houses with missing appliances, cabinets

COLORADO SPRINGS — News 5 Investigates has learned dozens of families in Colorado Springs are closing on new homes that aren’t finished when they move-in.

The supply chain shortage during the pandemic is leaving homeowners frustrated and wanting answers. Meanwhile, home builders say they’re doing their best to keep customers happy.

Johnny Lanigan closed on his Colorado Springs home last year. When we spoke with him a few weeks ago, he was waiting on dozens of cabinets for his kitchen and bathrooms.

Johnny Lanigan

KOAA

Johnny Lanigan talking with KOAA News 5

“My biggest beef is there’s no answer,” he told KOAA. “There’s no direct date for when my cabinets are going to be here. It’s been four and a half months.”

Johnny says he closed on his home and signed off on the final walkthrough believing the materials would come in a few weeks. Unfortunately, weeks turned into months. 

“The only answer I get is they will show up when they show up.”

Classic Homes President Joe Loidolt says he’s well aware of Johnny’s issues and says that as of March 2022, there are about 80 or so homes missing parts. 

Joe Loidolt

KOAA

Joe Loidolt, Classic Homes President

“I talk with the cabinet company on a regular basis.,” he said. “We’ve tried everything to get cabinet doors here. The bottom line is if they don’t have cabinet doors, they can’t send them. They were at one point 13,000 doors short across the country and this isn’t just a local issue–it’s a national issue. It’s not just this cabinet company. We’ve looked at other cabinet companies thinking we’ll just switch companies. They are all in the same boat.”

Loidolt says he understands Johnny’s frustrations and says his company is doing everything it can to provide updates to Johnny and other homeowners as shipments of back-ordered parts arrive. 

“We didn’t know that those cabinet pieces were going to be missing when we sold those houses that closed back in the fall of 2021,” Loidolt explained. 

Missing cabinets and drawers

KOAA

Missing cabinets and drawers

Loidolt says all of its customers will be taken care of accordingly. 

He adds that Classic Homes is the largest homebuilder in El Paso County—pushing out 600 to 700 new homes every year. 

He says that customer satisfaction is important and like other businesses, they’re feeling the heat. 

“We have lots of shortages,” he said. “We have appliances that we don’t seem to get in on time. We have certain garage doors that we don’t seem to get in on time. So we’re trying to find enough parts and pieces to get the houses on the finish line and the houses that we sell today, we tell our customers we don’t know what we may be missing when your house closes because that’s 7 or 8 months from now.”

Johnny says he’s not looking for conflict. He simply wants to warn potential buyers in this market to use caution when closing on a home that is not complete. 

“I’m not here to harm the company,” he said. “I just want my cabinets. We love our house. I think Classic is a reputable company and I’d buy another home again but I’d never buy a home that isn’t complete.”

According to Realtor.com, most closing dates are open to negotiation. Some are not, so you’ll need to read your contract carefully. 

Also, it’s important to document (in-writing) any issues or missing parts in your home during your final walk-through inspection. 

As of this week, Johnny says the majority of his cabinets have arrived and were installed. He’s still waiting on a few cabinet door frames which he hopes will arrive soon. 

Classic Homes reassured us all homeowners will be scheduled for installation appointments as soon as parts arrive.

News 5 reached out to multiple other builders for information related to the supply chain shortage. 

Response from Covington Homes: 

As of March 2022, the Supply Chain issues have not improved. In fact, they have deteriorated a bit.
There are longer lead times on everything from stone to garage doors to windows. 

The Supply chain issues began in February of 2021 and continued to get worse. 

In the beginning of the Supply Chain crisis I began tracking the following:

-Materials that were short

-Materials that were no longer available

-Materials that have increased lead times

-Materials that are on allocations

-Materials that have increased in costs as a result of supply chain issues and inflation

This list (at the time I stopped keeping track) had over 150 items.  I stopped keeping track of the list approximately September of 2021 because the Supply Chain issues were not improving and instead the list continued to grow.

Rather than increase production of many of these materials a large number of the manufacturers decreased their production and/ or the production stayed at the same levels it had prior to the large uptick in order and supply chain disruptions. The lack of increased production (brought on by multiple factors) exacerbated the shortages.

The Supply Chain issue (combined with the already existing labor shortage) caused longer build times for our company.  And the Industry as a whole.

Our average build time increased by over 3 months.  We have had to remove a large number of options and offerings from our product, we have changed the specifications of what we include in our homes we build, we have had our buyers re-select from product not available in the market to product that is available, we have had to raise the prices on the homes we build over 30% due to cost increases, and we have had to at time close homes missing a few items on backorder.  Overall, Covington Homes is faring well with being able to close homes without missing items, but it is my understanding that depending on which manufacturers Builders choose to specify in their product- items are missing at the time of closing because they are simply not available.

Here are some examples of the challenges we are facing (that we have been facing since early 2021) with the supply Chain:

Electric Transformers.  Currently there is a nationwide shortage on transformers.  What that means? Lot development is being delayed, therefore Builders are facing not being able to build more homes until that matter is resolved.  This will exacerbate our already tight supply of housing which is driving up the costs of housing.  

Engineered wood products- those have skyrocketed in price and have been put on allocations Meaning we are only given a certain number of those materials per week.

Lumber.  It has skyrocketed in price and hasn’t gone down much at all.  It is also being put on allocations in certain cases. Appliances are still not easily available (since we all have to compete with Lowes and Home Depot for our orders) and they are taking up to 10 weeks to get in.

-Garage doors are still 12 to 16 weeks lead time.

-Windows are anywhere from 16 to 30 weeks lead time.

-Stone is 12 weeks lead time.

-Cabinets are 8 to 14 weeks lead time.

-Exterior Doors are 12 to 14 weeks lead time.

-Additionally there is a long list of specialty items that are on lead times of 3 to 6 months.

-Shipping costs have skyrocketed. 

-Fuel is hit historical highs and fuel surcharges are now being passed off daily.

Suppliers are defaulting on their contracts to their distributors (the small business trades that the Industry purchases products through), and this is causing those businesses loss to their operating capital as well as losses to the Builders’ balance sheets.

These are just a handful of the issues that we are facing in this industry.

Response from the Housing and Building Association of Colorado Springs: 

Supply chain is definitely still an issue, not to mention having enough skilled labor to build the home.  An average home requires between 50-70 trade partners.  The number of skilled trades depends of the complexity of the home. Below are immediate supply chain issues:
 

These are considered “Critical Path” items –  without these items the result is the project halting until the product arrives         

  • Floor joists
  • Windows & window screens
  • Garage doors
  • Front doors
  • cabinets from certain manufacturers

 

Additional items that can stall a home build, probably not halt;   

  • OSB (Oriented Strand Board)  
  • Certain profiles of base board
  • AC units – depending on manufactures
  • Counter tops and tiles are inconsistent for availability
  • Paint and Primer
  • Color Pigment for stucco
  • Certain bathtubs and shower pans
  • Key padlocks
  • Siding
  • Outdoor main breaker enclosures (new code requirement)
  • 2-pole GFCI Breakers (new code requirement for dryers)

 

Below are examples of materials and items currently being affected by supply chain issues for the development side of home building. 

  • Water main line materials (pipe)
  • Water Service line materials (copper, hdpe)
  • Three-Phase transformers
  • Self healing wire (service side) for electric meter (coming through the trench to the riser).

 

Like many industries, there is a lot of volatility right now and for the foreseeable future.

Have a story idea for News 5 Investigates? We’re listening! Email us: [email protected]


https://www.koaa.com/news/news5-investigates/supply-chain-frustrations-families-are-closing-on-houses-with-missing-appliances-and-cabinets