BEHIND THE SCENE
Wondering what’s happening in the new construction business? Well frankly, prices are going up, thanks to a shortage of lumber caused by the COVID pandemic and a decades-old beetle infestation in Canada. In fact, recently the National Association of Home Builders reported rising lumber prices have added $24,000 to the cost of building the average single-family home and $9,000 per apartment. But don’t despair if you are in the new home market, there are still many good reasons to build.
In the last year, supply and demand issues caused by the pandemic led to shortages of some building supplies, resulting in record cost growth for lumber and some building materials.
As the number of existing homes for sale still sits near a record low, many homebuyers are naturally looking toward new construction. However, rising prices and tight inventories for lumber and other building materials have skyrocketed during the last year, making the cost of building a home more expensive.
Add to this the fact that the beetle infestation in Canada has caused the price of lumber in the US to rise by more than 180% according to the Nation Association of Home Builders. As a result, the US has had to look to Europe for additional supply.
Now you’re probably thinking to yourself—Yes, at the onset of the COVID pandemic many lumber mills were forced to temporarily close and supply chains were interrupted, but restrictions have been lifted for the most part. Why can’t the lumber mills just produce more? They are in fact doing that, but not at the levels needed due to labor shortages caused by low pay and dangerous working conditions. In short, while the supply and demand issues are getting better, lumber mills are not producing nearly fast enough.
However, as we mentioned above, if you are in the new home market, there are still many good reasons to build.
Historically low mortgage rates are one good reason for building a new home now. Plus new homes usually come with warranties that can make all the difference if an unexpected home repair happens. What’s more, new- builds are usually more energy-efficient than older properties so you will enjoy cost savings for years to come. And don’t overlook the benefits of building your home to your exact specifications and desires. Just imagine, everything you always wanted, all shiny and new, in the home of your dreams.
So examine all the facts for yourself before you compare new and existing home sales. Depending upon your particular set of circumstances, a new-build may be just right. Either way, Team Athey would be more than happy to help guide you every step of the way by negotiating the best deal possible.
Hi, I’m Suzanne Athey, owner of Team Athey & Remarkable Property Management. If you’d like to talk further, call me at 469-916-1222 or email me at suzanne@teamathey.com. I’d love to visit with you and discuss your specific home buying needs.
