Crazy Inflated Home Construction Costs?

[apkleinschmidt]

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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[Quackerbox]

Hopefully by the time I retire in 10 years

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[Dale Moser]

It's absolutely insane, and I can't explain it.

It's a miserable time to be in this business.

[Stetsonoverton]

not sure when it will happen but lots of people are still buying house and building even with the stupid high prices right now.

[texas_legend]

Reports I have seen say lumber crunch goes into Spring 2022. But eases up then.

[Sticks&Strings]

Originally Posted by Dale Moser

It's absolutely insane, and I can't explain it.

It's a miserable time to be in this business.

That's the truth. Unfortunately the low interest rates are allowing entry level homes to be built and still have a lower payment than an apartment. I feel this is a huge part of it. I just got another price increase from most of my vendors.

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[John Paul]

Went to buy material for a "small" 10x14 2x6 platform for out in front of our 5th wheel.

Holy Smokes! I went ahead and did it but it was more painful to buy it than build it...

[jer_james]

I have no idea ... It is absolutely insane though.

Our median construction costs across the state are unexplainably high. Even the home sales in our NTexas area has skyrocketed.

We have so many homes that need so much work, it has completely ruined the entire market in terms of material cost.

[Snowflake Killa]

I believe it will bust soon

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[Benno]

Lots of builders won’t sell dirt anymore. Can’t sign a contract on a home until it’s at sheetrock stage or that range due to prices constantly changing and the market being hot.

[Leon County Slayer]

I suspect it goes down eventually but not by much.

[BlackoutRam2500]

I keep going back and forth on this subject. On the one hand we all want prices to be lower but in order for that to happen the economy has to "cool off" or crash in which case employment/business will suffer.

The government keeps printing money and in order to service their record high debt they have to keep interest rates super low. Low rates = cheap money = increased demand. When will it end? Who knows BUT hurricane season is coming up. If you think lumber prices are high now hide and watch.

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[Jason Fry]

My parents sold a 40 year old 1k ft^2 house in Austin for $300 a ft and got 60 k more than asking price.

It’s gonna have to crash before I’m willing to move. Got two more years here then I guess I’ll find out.


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[captainsling]

When people quit paying the prices.

[critter69]

It’s crazy here in Colorado too. But they are still building like crazy, and most houses that are for sale are getting 60- 80 thousand more then asking price ! I heard today average house cost here right now is 600,000.00 !

[Playa]

Originally Posted by BlackoutRam2500

I keep going back and forth on this subject. On the one hand we all want prices to be lower but in order for that to happen the economy has to "cool off" or crash in which case employment/business will suffer.

The government keeps printing money and in order to service their record high debt they have to keep interest rates super low. Low rates = cheap money = increased demand. When will it end? Who knows BUT hurricane season is coming up. If you think lumber prices are high now hide and watch.

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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

[Bear Charge]

Not a buyer's market but but new builds are higher than the options

[bryan sandlin]

check this out. started to build a blind for a friend. stopped when we went to check wood price.

[PeePaw on Fork]

It's not just materials, land has skyrocketed also

[texasdeerhunter]

Originally Posted by Playa

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

This. I remember 2008 very well. This reeks of 2008 all over again. I know the number of credit worthy borrowers hasn’t increased at the same pace that people are buying/getting financing for homes. We have set ourselves up for a big bubble

[Rubberdown]

I just paid 6.50 for a stud. Jeezum Pete.

[Ksbowhunter]

Existing home prices are rising and unlikely to go the other direction as a whole. Build prices will soften when commodities soften. I think it will be cheaper to build than buy at some point in the near future

[Texas Stalker]

I just paid $60 and some change at Foxworth Galbraith for a sheet of 7/16 osb. Yeah you heard me right. And that was with my contractor account. I may be done with that lumber yard. Straight up price gouging. I had to have it right away or I’d have driven 20 minutes to HD and got it for $40......still a rip off.


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[Notaguide]

Construction cost across the board are rising. Replacement cost on existing will also increase which will result in additional insurance premiums. Tax appraisals being sent out right now are averaging a 12-15% increase from what I'm hearing.

The only thing that ever fixes high prices is....more high prices. Inflation is here and will only be stopped by a recession. The crystal ball questions is when?

[thaRealTexx]

My neighbor is a custom home builder and he thinks it could be 2-3 years.

[CEO]

Wife is having people she quoted customs for in 2019 come back now wanting those build prices honored. Like mentioned above, not only have materials went crazy, lots have too...if you can find them.

[sqiggy]

I was almost close to start our build when COVID hit. Now, I’m thinking it will be out of reach. Wife talked to a manufacturer house builder last week. May have to go that route being they quoted a price way lower than a build. I don’t want to go that route but may not have a choice.

[Ksbowhunter]

Originally Posted by sqiggy

I was almost close to start our build when COVID hit. Now, I’m thinking it will be out of reach. Wife talked to a manufacturer house builder last week. May have to go that route being they quoted a price way lower than a build. I don’t want to go that route but may not have a choice.

Don’t forget to factor in cheap money. 2.5 for 30 years

[huntingfanatic]

Originally Posted by thaRealTexx

My neighbor is a custom home builder and he thinks it could be 2-3 years.

My buddy is a custom builder and is about to begin building our house. Price is $90,000 more now than it was 7 months ago. He said he thought MAYBE end of 2022. He keeps apologizing and showing us the bids. Lumber package bids are no good until they are paid for. They won’t even hold them a couple weeks

[stickemhard3]

My wife and I are in the closing potion of our construction loan. We put off building while she was in nursing school but that’s looking like a bad decision with all these crazy prices. I am building it myself so I’ll get some cost savings but not much. Lead times on all materials have gotten out of hand too. Everything is close to a month lead time compared to a few days. Lumber quotes are taking 3 weeks to fill and are only valid for a week. Our metal roof has been changed to a shingle roof as one of the cost cutting moves.

[Txtourist]

Roaring 20’s are apparently here. It’s strange seeing this play out. Shortages and price increases are making each day a headache for the cabinet business. Still bidding a lot of projects, every shop in town is behind/hiring. It’s like a mini bubble with labor wars going on and materials skyrocketing. I see it getting worse as trades fall behind and don’t watch their margins, just shoulder to the wheel until they run out of money.

[M16]

Mine went up around $100,000 since last year. But I wasn’t able to get everything together until now. At least my present home’s value has increased so it’s kind of a trade off. It is what it is. No worse than a bad day in the stock market.

[Anteloper]

Theyre building like crazy around me and my tax appraisal is way up

[Kevin]

We luckily finished building our house late 2019 / early 2020 at the start of the COVID outbreak. Since then OSB went from $15 to $45 and is expected to be $60 by summer. Would have added a LOT to the cost of the house and to be honest, we would have not built the same house.

[MBV77]

Originally Posted by Texas Stalker

I just paid $60 and some change at Foxworth Galbraith for a sheet of 7/16 osb. Yeah you heard me right. And that was with my contractor account. I may be done with that lumber yard. Straight up price gouging. I had to have it right away or I’d have driven 20 minutes to HD and got it for $40......still a rip off.


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Was standing behind a guy in Lowe’s that had a cart full of it. When the cashier rang him up and told him the total he very loudly said......**** that!!.....and walked out and left it there.


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[AgHntr10]

I don't know but it sucks! We are trying to weigh our options of getting it done now and locking in a good interest rate or waiting and hoping the material prices fall and that interest rates haven't increased enough to offset the savings on material.

[Notaguide]

Originally Posted by thaRealTexx

My neighbor is a custom home builder and he thinks it could be 2-3 years.

Increased lot development along with new home starts will be massive within next 18 months. Give it a few additional months to build up a little more inventory and the blood bath may begin. But I've been wrong before.

[blackfoot1]

Up here on the Peninsula, the lumber yards are saying they will be out of wood in a month... pvc, pex, etc will be gone too....

[HUNTNETIME]

4 new 'hoods being built here in Flour Bluff(Corpus Christi) that I know of. It's insane. Doubt prices will ever come back down. Good luck.

[kparker158]

Can only pump so much air into a balloon. She’s gonna pop, eventually.

[gingib]

No chance it goes back down!

People are paying it now, why would they lower the prices

[SB09]

Originally Posted by Playa

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

Exactly what I was about to say. You nailed it.

[Flex]

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.

[7sdad]

It'll go down when the interest rates go up.

[Playa]

Originally Posted by gingib

No chance it goes back down!

People are paying it now, why would they lower the prices

Because they won’t be able to pay these prices when a recession hits, and a boom is never sustained, it will always bust. Interest rates will have to rise to keep up with this inflation. Combined high materials cost + increased interest rates will slow/stop the growth. Eventually california will have a surplus of housing inventory, more people are already leaving than moving in. That will drive down prices there which will eventually drive down prices elsewhere due to lower demand and less available capital.

It will come down. It may not fall to pre Covid prices, but it will come down.

Originally Posted by Flex

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.

Yep I was going to build a 25x 35-40 barn with an office and guest space, but I really only NEED the office portion, I’m not going to overspend for the rest

[CEO]

Originally Posted by Flex

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]

Originally Posted by Playa

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]

Originally Posted by Playa

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.