Building a home has always come with its challenges. You have to be able to envision the final product, be flexible with your timeline and understand that it isn’t a quick turnaround. 2020 and COVID have added an extra layer of difficulty when it comes to building, like they have everything else. I could go on and on about how to prepare yourself for building a home but I’ll narrow it down to the five things you need to know if you’re starting a new construction home in 2020.
1. Product Costs Have Risen
I hated ECON in college but this is an example of the most basic principles of ECON 101: Supply and Demand.
After the shutdown in March and April I think we all assumed we’d see the effect immediately on the availability of products. Thankfully there was a residual supply of most items through the second quarter and as we all got back to work this summer things continued fairly “as usual.” As we wrap up the third quarter though we are starting to see the effects of that initial shut down. Now that inventory has been depleted for items like lumber, appliances, and windows and the demand is rising the cost is increasing.
As an example, the cost of lumber has increased 130% over the last year. The rising cost of items like lumber and other home materials will cause the total cost of your home to rise. According to the Home Builders Association of Virginia “The recent spike in softwood lumber prices has caused the price of an average new single-family home to increase by $16,148”
2. Timelines Have Increased
When you build a new home the county or city you are in has a multi-step inspection process to make sure the major systems and structural integrity of your home are solid. These inspections have to be done in a certain order and can hold up construction if they take several days to complete.
With a decreased number of staff members the city/county offices are taking longer than usual to complete inspections. This has caused new construction homes to lengthen their delivery timelines.
3. Demand for Trades is High
This is sort of a combo of point one and point two. Inventory is low when it comes to resale homes so people are turning to new construction homes instead. This increase in demand for new construction has meant an increased workload for trades like HVAC technicians, electricians, and painters. Realistically, there are only so many hours in the day and the people doing the work only have so much capacity. This is also contributing to the increase in the timeline.
The long and the short of it is that we are seeing the residual effects of the shutdowns in March and April now in August and September and we will likely continue to see those effects through the 4th quarter. My best advice is to have patients, give grace to the builders, and set realistic expectations for your completion date.