Construction costs are out of control

[rob_s]

this probably should be in the labor shortage thread at this point. not sure if there's a way to move it...

By and large I don't disagree with much in your follow up. If you're using hand written notes as a punitive step to get people to do stuff they aren't doing when the same information comes through other channels I get that. But to me it doesn't sound like "old guys failing to teach young guys" as much as it just sounds like generic unprofessional behavior. The same people who even if they had been properly instructed would still be doing the same thing.

The same millennial demographic isn't nearly as problematic elsewhere. At least as far as I've seen.

you seem fixated on the millennial part, so I'm assuming you are one? I'm not sure why you keep fixating on that aspect.

the issue is that even the people doing the instructing don't know, due to the experience vacuum in the late aughts caused by the recession. Many of them are Gen Xers. I started in the industry in 2001 and many of the people I see screwing up the training due to a lack of their own understanding are Xers. And the Boomers are maxing out their 401(k)s and trying to bail before the next bust. or are too far removed from the day-to-day to know what's going on. it's kind of funny though once they find out and say "wait a minute, we're not taking meeting minutes or doing daily reports? WTF?" and I say "I dunno, ask your protoge, he's in charge now".

Of course, not only do the "leaders" not know how to teach any of this now, most of the "learners" weren't even in college, let alone the industry, when all of this happened.

it's not about hand-written notes at all. this is ALL electronic. Send an email asking them to start their mockup. Send a text. Email their boss. Email them again. Text their boss. Call them. Show up on site. Nothing. Guess what, we're having a meeting with an agenda and minutes (electronic, not on paper, although amusingly most of these people want to write it down on paper regardless of age).

Daily logs are done electronically, and the trades enter their own time, the weather auto-populates, etc. All things that used to be hand-written. and many times double-entered.

I have another theory that most of the people going into construction management do so because they *think* they can hide from tech. They take an accounting class.... spreadsheets. pre-med.... xrays are digital. pre-law... lexis/nexis (or whatever it's called) is online. Shit. I know, construction! there can't be tech in construction!

[Darth_Uno]

I would have thought they'd lock in prices when they go under contract, but apparently that isn't the case.

Unfortunately, that's not really easy to do. Most "locked in" prices, especially on lumber, have a cutoff date when you have to take physical delivery. Some places will let you pre-pay, but you have to have the liquidity to do that which many smaller contractors simply don't have. And if you have a construction loan, the banks are reluctant to pay for a product that you don't actually have on site yet - but you also don't want to drop it off on site and have it sit for weeks or months where it can get damaged or stolen.

[jh9]

you seem fixated on the millennial part, so I'm assuming you are one? I'm not sure why you keep fixating on that aspect.

The original post I quoted, since moved to somewhere else I don't see offhand, had that as a core part of your argument so yeah. I'm less "fixating" on it and more like "addressing". I'd rather bow out now rather than chase it down. This doesn't seem to be going anywhere useful.

[scw2]

Unfortunately, that's not really easy to do. Most "locked in" prices, especially on lumber, have a cutoff date when you have to take physical delivery. Some places will let you pre-pay, but you have to have the liquidity to do that which many smaller contractors simply don't have. And if you have a construction loan, the banks are reluctant to pay for a product that you don't actually have on site yet - but you also don't want to drop it off on site and have it sit for weeks or months where it can get damaged or stolen.

That actually makes a lot of sense, and obviously you'd be an idiot to not lock in prices as a builder if it were super easy. Seems like an especially tough position to be in as a smaller builder which can't afford to hedge price risk.

[Andy T]

I am one of the people that purchased new construction this year. This is in the West coast of FL. Right after I signed the agreement, the price for a comparable house went up by 15k. The builder (a large company that is building communities) was hit with delays due to material shortages. Right now they are waiting on windows before a milestone inspection/dry wall stage can begin.

I am, somewhat anxiously, waiting to see what the real estate values will shake out to be in 6 months to a year.

I also thought about getting a pool. I found 2 companies in Tampa area. One told me to come back after October (this was in May). The other didn't return my calls.

The project manager for my house was hired out of retirement. He also mentioned the lack of skilled labor.

[AKDoug]

Unfortunately, that's not really easy to do. Most "locked in" prices, especially on lumber, have a cutoff date when you have to take physical delivery. Some places will let you pre-pay, but you have to have the liquidity to do that which many smaller contractors simply don't have. And if you have a construction loan, the banks are reluctant to pay for a product that you don't actually have on site yet - but you also don't want to drop it off on site and have it sit for weeks or months where it can get damaged or stolen.

I allowed several people to pre-pay for wood back in May when there was no relief in sight and they just wanted to make sure they weren't getting hosed any further. All were delivered right before the drop and they all saved probably 20% doing it that way. I have one sitting on the books that was pre-paid for back in October 2020. It was a charity case for a wildland fire victim that several non-profits paid forup front. I actually sold that inventory (with their knowledge) and will replace it no matter what the cost. I was sweating bullets in June, but it looks like I may be o.k. because they plan to start in September. At this rate we should be about even on the pricing.

One of my big suppliers is the distribution side of Weyerhaeuser. They offered me several truck loads of material at a HUGE discount. Something is afoot and I think prices may be dropping even further.

[OlongJohnson]

I've been holding off on getting quotes to replace some fences. Looks like I may be able to get that done soon.

[Yung]

I've posted some headlines and snippets this conversation reminded me of, in the politics subforum.

[Darth_Uno]

Finally signed a custom home contract. That's actually just my third one this year. Normally we'd have about ten by now, and be booked through winter. Cost-plus just scared too many people, but I wasn't about to not have cost-plus at this point.

Prices are dropping a bit. I had one job that I estimated the framing package at $26,000 - it came to almost $53,000. Just last week I sent the same print out for a lumber quote and it was $45,000. I expect they may stabilize around 2/3 of the peak. So a sheet of plywood that was $60 may end up around $40. 40 sounds a lot better than 60, but it was still $15 a year ago.

[AKDoug]

Lumber at the mill has now dropped to the lowest prices we saw in 2020, down to 2019 levels. Most of us were flush with inventory when the huge drop happened so my competitors and I are playing the waiting game to see where prices will land. I did a 20% reduction of my retails 10 days ago when the local Lowes and Home Depot dropped theirs. There has been no movement this week and I'm holding firm until they move. I've already taken a $50K loss on the materials I have on hand if it all sells at this lower price.