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Thread: Construction costs are out of control

  1. #161
    Site Supporter rob_s's Avatar
    Join Date
    Nov 2011
    Location
    SE FL
    Quote Originally Posted by Darth_Uno View Post
    Bump, if anyone is still interested. Lumber is manageable. Concrete is going up Jan 1 to $144/yd (before tax and delivery/fuel). Early ‘21 I remember everyone freaking out (including me) when it cracked $100.

    Not getting too many calls on custom homes. I said all along when interest rates hit 7-8% it’ll hit the brakes hard.

    What we’re seeing is just not a lot of younger people buying right now. To beat the interest rates, we’re seeing buyers with large down payments on the mortgage. Could be from investments, equity in their current home, or inheritance. Unfortunately that usually precludes younger buyers.
    A lot of the big name home builders are offering discounted rates right now

    We were considering a move and the only way I would even think of it was to another (a) rent, and plan to do so for at least two year or (2) buy from a bigbuilder to get a bought-down rate.

    In the end, the housing market in general was a big reason we are staying where we are.

    On the commercial/multi-family/hospitality side, rates are killing us. Most developers care more about materiallrice stability than they do the actual price, and things are finally relatively stable, but with the rates where they are they can't make the jobs pencil.

    Until I got into this part of the indhstry (started in municipal work) I had no idea how many apartments and hotels are built on spec and get sold within the first year operation. That means the developer building the job has to figure out his own construction loan I treat rate but also the rate his future buyer might be able to get.

    At the end of the day, much like single family homes, the rate affects the price and vice-versa.
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  2. #162
    Site Supporter MGW's Avatar
    Join Date
    May 2012
    Location
    Kansas
    Quote Originally Posted by Darth_Uno View Post
    Bump, if anyone is still interested. Lumber is manageable. Concrete is going up Jan 1 to $144/yd (before tax and delivery/fuel). Early ‘21 I remember everyone freaking out (including me) when it cracked $100.

    Not getting too many calls on custom homes. I said all along when interest rates hit 7-8% it’ll hit the brakes hard.

    What we’re seeing is just not a lot of younger people buying right now. To beat the interest rates, we’re seeing buyers with large down payments on the mortgage. Could be from investments, equity in their current home, or inheritance. Unfortunately that usually precludes younger buyers.
    This is good to hear. I bought a house last spring at a reasonable fixed interest rate of 4%. I was considering building a new house but the prices were out of control compared to a comparable house that was just a few years old. I need to finish the basement of the house I bought. I’m gearing up to start that in February. I feel like waiting was a good idea.
    “If you know the way broadly you will see it in everything." - Miyamoto Musashi

  3. #163
    Site Supporter 0ddl0t's Avatar
    Join Date
    Feb 2019
    Location
    Jefferson
    Back in January:
    Quote Originally Posted by 0ddl0t View Post
    I'm in the planning stages of building a 2/1 610 square foot attached ADU (new construction, not a garage conversion). Estimated price is coming in just shy of $250,000.
    I couldn't quite make it pencil at $400/ft, but by April contractors were calling & offering over 25% off their initial bids. Broke ground in May and completed in August for just under $180,000 (plus another ~$20,000 in permits & fees). Happy with it and the $2,100 rent...

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