Crazy Inflated Home Construction Costs?

[CEO]

Yeah, this is crazy. Wrong time to be looking. I had planned on building a Barndo for me and the kids. But don't see anyway possible now. Not going to be 200k in a 100k barndo.

I hope you guys above are right about it going back down eventually. Market is insane in Central Tx right now.

We finished our office/shop metal building around a year ago. 40'x80'. The guys that built it stopped by last week with some potential clients who are looking at building one the same size. They told us if we did the same building now, it would cost around 30% more because of material costs.

[armadillophil]

Everybody knows the is not sustainable. The market could hum along at this rate for another year or two but I think there will some national or international event that pops this bubble sooner

[CTR0022]

Nobody is calling it what it is, but inflation is here and growing fast. This ^^^ is not a sustainable model. We can’t keep printing $, and acting like a drunk banker lending to a drunken sailor.

Truthfully we just replaced lax lending practices of the 2008 debacle with cheap money. This bubble will bust the same

I agree, but when the bubble bust the government will just have to print more money and bail everyone out.

[jer_james]

Nobody is calling it what it is, but inflation is here and growing fast. This ^^^ is not a sustainable model. We can’t keep printing $, and acting like a drunk banker lending to a drunken sailor.

Truthfully we just replaced lax lending practices of the 2008 debacle with cheap money. This bubble will bust the same

I dont believe handing out $1400 checks to people making less than $75k is causing the housing/construction market to go insane. Just look at the pool parts market.

I do believe inflation plays a part, but much smaller than what is being touted. Supply and Demand. I have been in the Insurance business for 15+ years and the amount of damage this freeze caused is not comparable to anything that I have ever seen. The amount of damage all across the state from every major city is unparalleled. A hail storm hits maybe a couple cities and causes some big changes, but this is flat out unheard of.

I have been dealing with Serv Pro of Deleware and Maryland for goodness sakes. They've literally packed up shop and moved South.

[powderburner]

I had my pier rebuilt at IKE it was 10K for the build. Just finished the rebuild from this last years storms and it was 30K for the rebuild.
Lumber is stupid high and not coming down. Cheaper wood from Canada is not making it into the states. Plants are not producing as much so demand is high and supply is low.

[CaptainDave]

Although inflation is a factor, I don't believe it's a significant factor at this point. I believe it mostly has to do with a home building market that already had high demand from all the people moving to this State in addition to historically low interest rates. Then combine that with the significant amount of damage caused by the February freeze. I know a couple insurance adjusters and the amount of damage caused by the freeze is eye opening to say the least.

I do agree the bubble will pop or at least start to deflate at some point. My guess is that repairs from the freeze damage will eventually get caught up and interest rates will eventually start to increase. Actually, rates have trickled up slightly over the last few weeks.

[Chad C]

I just paid 6.50 for a stud. Jeezum Pete.

10' stick No.1? You got a deal if so.

[Chad C]

I thought the housing bubble would pop in 2018, yet here we are. This isn't going to change any time soon.

[scott.str]

We looked at buying a house here in Dfw and offered 7k over asking plus free rent back and other things. Thought it would be a decent offer. We where not in the top 25 I guess offered.

[KDinTX]

We looked at buying a house here in Dfw and offered 7k over asking plus free rent back and other things. Thought it would be a decent offer. We where not in the top 25 I guess offered.

Have some friends looking in our area, Waco, Hewitt etc, and offered 25k over asking on the last one they put in and still lost it. Crazy market around here.

[Bill]

The guys I know in Montana who have lumber yards selling primarily to contractors say it’s not going down if demand stays where it is now. An economic crash/ bubble bursting changes everything.

Our son is a builder and agreed. Low interest rates and people not spending discretionary $ during covid are fueling the demand.

Land and house prices in Montana are going up and supply is low.


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[JFFB]

Yep

Does anyone have an educated guess as to when these super inflated material costs will normalize? End of 2021? 2022? I don't ever expect them to get back to pre COVID numbers but this is ridiculous.

We got the bid for our planned build and material costs are 70-120k more than anticipated on a 2200 sqft house. We will probably hit the pause button on construction and hang tight for a year or two to let costs go down if we have to. Any opinions on possibly giving up these low interest rates on the hope that material goes down in the next couple years? If it was a 20-30k difference I would just build but 100k difference is pretty substantial.

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Its a 50/50 kind of deal you just don't know what's going to happen in a year from now it might just get worst.

[Eastwood]

The lumber futures today are record high. Almost 1,100 per thousand board feet.

[bboswell]

Theee will be a lumber price drop in the next 2-3 weeks but it won’t be back to normal.

At the mills at least, no clue what retail will do.

[Playa]

We looked at buying a house here in Dfw and offered 7k over asking plus free rent back and other things. Thought it would be a decent offer. We where not in the top 25 I guess offered.

My wife’s sister and family are trying to move from Manhattan, KS to HEB or Keller area. They placed multiple offers on homes, most in the $360-370k range and offered between 390-400 and lost on 5 or 6 and finally got one in Keller over the weekend. I can’t wrap my head around it. And neither of them have landed a job yet.