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Thread: Construction costs are out of control

  1. #1
    Gucci gear, Walmart skill Darth_Uno's Avatar
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    Construction costs are out of control

    I posted elsewhere that we eliminated fixed price contracts on new homes, and changed to either a cost plus contract, or a fixed price with a buffer. We decided today to only offer cost plus. Prices keep going up, I’ve been advised from several vendors about almost certain future increases, and that’s not a risk we can continue to absorb.

    Lead times for material are getting further and further out, and costs keep going up. I’m actually putting homes on the back burner and pushing for remodeling - generally shorter timelines with more controllable costs, plus it’s honestly more profitable per man hour.

    Frustrating for both me and potential customers, as neither of us want to be on the hook for unlimited costs, but losing money is a good way to not stay in business very long.

  2. #2
    I work in maintenance/construction for a municipality. Lumber is out of control. Plywood is mostly over $50. A 2x4 stud is like $9. It's ludicris. And it seems like it just keeps going up.

    The guy I work with is a certified door guy and installs them on the side. His orders keep getting pushed back. Sometimes 6+ weeks just for him to get the door. They just stopped giving him lead times all together. He's had to start taking deposits, because the costs are rising to fast between quoting a job and then starting it.

    I'm sure Florida's minimum wage laws and impact fees going up will help everything though...

  3. #3
    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.
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  4. #4
    Alaska is really seasonal on construction, so I have a massive expenditure in April to get ready for the season. I usually buy 90 days worth of wood. This year I really could only afford 30 to 40 days worth. I guess the good news is that I'm still moving product and I'm making money at it, but the risk is high.

    An odd thing I cannot buy anywhere is 1x4 through 1x12 pine boards. It's a mainstay product for our DIY customers that really aren't sold to contractors on a large scale. Nobody can tell me why I can't get any. My only assumption is that framing lumber is so high they are just producing that instead of wasting time on thinner boards.

    Even though I'm a lumber retailer, I am putting all my construction projects on the back burner. There is absolutely no way these prices will stay this high indefinitely.

  5. #5
    Four String Fumbler Joe in PNG's Avatar
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    The word I'm getting from my mom who's one of the top sales people in the Villages is that sales are also through the roof right now.

    It would appear that people are getting the hell out of the damned yankee People's Democratic Republics.
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  6. #6
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    With costs so high and continuing to rise is it demand that is continuing to drive costs up or is there something else?

  7. #7
    Site Supporter hufnagel's Avatar
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    Quote Originally Posted by rd62 View Post
    With costs so high and continuing to rise is it demand that is continuing to drive costs up or is there something else?
    The way I understand it is:
    For us east coast near the self-important cities, the steaming masses are fucking off from the urban jungles, and moving to places that have more than a postage stamp for size, and have at least SOME grass; people being locked up in a shoe box realize that sucks hard for months on end.
    Combine that with a near equal (if not larger) number of people who honestly can't stand their own families, and need to add on space for 2 parents and 2.2 kids who are suddenly living/working at home again, so additions become a thing.
    Since people couldn't take "vacations" really, they decided to add on pools, decks, landscaping, etc. to make their slice of the planet just a little more bearable when they're forced once again by Johnny Law to sit tight.
    And finally, it was my understanding that lumber is a pretty big import for us, so with the ports all shut down like they were, it crushed the supply chain.
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  8. #8
    Gucci gear, Walmart skill Darth_Uno's Avatar
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    Quote Originally Posted by rd62 View Post
    With costs so high and continuing to rise is it demand that is continuing to drive costs up or is there something else?
    Short answer is it’s a combination of both demand and a shortage. Nobody seems to know the details. Some manufacturers are producing at record numbers, and still can’t keep up for a number of reasons. One of them being that raw materials are getting harder to come by. Which has its own set of issues.

    I know of some larger companies that have suspended all completion dates. I actually have the advantage there, since I can find something to complete your project, whereas the guys with dozens or hundreds of homes sitting are looking at a nightmare if they can’t get what they need.

  9. #9
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    We recently downsized homes. The house we bought is perfect except my wife no longer has an office. We have decided to close in the garage. I have been shocked at the prices to close in the garage. I have also been shocked to see the range of estimates. Ive gotten estimates that were 4x other estimates. I was going to wait but dont know if prices will continue to climb.

  10. #10
    Last month I did a small project that required three sheets of 4x8 3/4" G1S plywood, and for which nothing else was suitable.

    The local Home Depot was able to provide these at a cost of C$87 per sheet.

    When I looked at the lettering on them it said "Made In Chile", which might account for some of the $87.

    Nothing against Chile, and it was nice plywood (although not $87 nice), but this is Canada and although we can't seem to make PPE, vaccines, semiconductors or many other useful things I thought we could at least make plywood. Where has it all gone?

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