Construction costs are out of control

[Darth_Uno]

I'm now thankfully booked through October with framing and new home starts. Everyone is trying to lock in a low interest rate.

I've told several other people who called that I'll be happy to quote but the only contract I'll sign that far out is cost plus (flat fee for my labor and contractor responsibilities) and everything is billed at cost. There's no point doing a quote right now. Any number I give you will not be accurate in 8 months. I'm just trying to avoid looking like I don't know what I'm doing with pricing. But nobody knows what they're doing. Lumber is all over the place, and everything else keeps going up.

[Darth_Uno]

I have seen quite a bit of extensive professionally done house projects in my area. I think its the future in my area as there really isnt any building space left. Ive also seen lower cost areas going through upgrades. I expect it wont be long before housing here is unaffordable.

Nearly a year later from your post, I ran all the numbers and we are an average of 35% increase from quotes in December 2020. Homes I was building for 300k are 400k. 400k homes are over 500k. 500k homes are significantly more, since you generally start to get into features and products you don't see on more affordable homes (dual HVAC, trim features, etc). In October 2020 I signed a contract on an appx 2500 ft² home (nothing too fancy, mostly our "normal" features, only bigger) for $440,000. I finished a quote for an identical home today for $620,000.

No real point to this, just an observation.

[rob_s]

Friend in the DC metro area is being verbally quoted $400-500k for an 1100sf Reno/addition from two different sources.

I can’t tell yet if that’s “go fuck yourself” money or real.

He’s talking to a new guy now.

[Darth_Uno]

Friend in the DC metro area is being verbally quoted $400-500k for an 1100sf Reno/addition from two different sources.

I can’t tell yet if that’s “go fuck yourself” money or real.

He’s talking to a new guy now.

Wouldn't doubt it. I've heard DC, Denver and the coasts are at least double if not triple the costs here in sunny Bufu IL. I can't keep my new builds under $200/ft at this point. Remodels/additions are likely even more, since you've got the construction costs and removing/redoing existing components. Plus, you know, you just charge more for remodel work.

[Darth_Uno]

Well, I am booked in to Spring of '23. I'm not even doing quotes right now. I'm telling potential customers that due to volatility and being almost a year out, it's a waste of both our times and call me in the fall unless you want to sign an open-ended cost plus contract.

Prices are higher than ever, and people still want to get in before interest rates go up more. Unbelievable. Lumber's down but just this week I got hit with concrete, drywall, and aluminum increases, plus I'm getting hammered with fuel surcharges on damn near every delivery.

[Malamute]

... Lumber's down...

Thank you.

I hadnt checked in the past couple months, but my fence project was on super slow motion because of material prices. The first couple 4x4-8 posts I bought were $5-something each, then about $18 or so, which stalled me out. Seeing your post made me check the current price ($10 ea), Ill go grab a few more posts now that theyve become realistic for my budget again.

[rob_s]

Concrete is a major issue right now. Apparently being driven by cement (no, they aren’t the same thing, cement is an ingredient in concrete. Stop saying “cement” when you mean “concrete” you sound like a rube). Which means that things like block will (May?) become an issue in the future.

The concrete shortage is taking its toll on schedules. Jobs that should be pouring on a 5 day cycle are pouring at 8 and 10 day cycles.

Being a type A, “relationship” business, every construction exec in S Florida is calling the batch plants trying to beg/demand/leverage their “relationships” to get material to no avail. You can’t even pay extra, they are all just rationing to all of the major players.

[Cory]

Concrete is a major issue right now. Apparently being driven by cement (no, they aren’t the same thing, cement is an ingredient in concrete. Stop saying “cement” when you mean “concrete” you sound like a rube). Which means that things like block will (May?) become an issue in the future.

The concrete shortage is taking its toll on schedules. Jobs that should be pouring on a 5 day cycle are pouring at 8 and 10 day cycles.

Being a type A, “relationship” business, every construction exec in S Florida is calling the batch plants trying to beg/demand/leverage their “relationships” to get material to no avail. You can’t even pay extra, they are all just rationing to all of the major players.

Matches what I'm hearing from my Mom. She runs the office of a masonry business. She schedules the block layers, pouring all that. They do enough business that she actually dispatches the trucks from the concrete place for them because they do so much busoness and have a great relationship. They've gone from pouring 5 days a week to 3, and are pouring significantly less houses per day.

[Glenn E. Meyer]

The area we live in as about 10 new homes in construction. I'm told that many were contracted before the Covid slow down. The homes however have gone up about $100K per home, easily. We were lucky as we contracted and moved in with the lowest interest rates and just before Covid hit.

[Borderland]

Teamsters 5 month strike just ended here. That was the truck drivers and pump operators who went out. The county where I used to work has about 75 residential permits issued every month. That doesn't seem like a lot for a county of 800K.