When you think of this Hurricane season, Southeastern Pennsylvania’s real estate market probably doesn’t come to mind. If not, you’re in good company, but local home builders are bracing for the impending fiscal impact of last month’s storms. They’re facing an increase in material costs, which in turn will cause a spike in the cost of renovations and new construction. So, if you’re looking to build a new home, or remodel an old one, you need to act now.
Gas prices are already up 50 cents per gallon over this time last year, which is boosting job costs. Getting construction materials and personnel where they need to go can already get expensive. It doesn’t help when the cost of fuel increases. Even so, the price at the pump isn’t the problem that’s keeping builders up at night, but the looming material shortage does.
The immediate threat of a gas hike is already here, but we can expect the cost of fuel to stabilize quickly. However, with reconstruction getting underway in the south, home construction is facing a shortage. The effects of which are not likely to go away anytime soon. The supply of construction materials is running dry because of the explosion in the demand. All the materials being poured into rebuilding, is going to cause a shortage in the construction essentials everywhere else. As the demand continues to increase and the supply dwindles, prices will increase exponentially. The new construction and home renovation market is staring down the barrel of a price increase, and you can expect that price to be passed on to the consumer.
With the market bracing for this impending price increase, suppliers have already starting to contact local home builders to update their quotes and pricing sheets. Lumber is the first industry to increase their costs, but you can look for Drywall, and others, to follow suit. These prices have home builders scared. They know that they won’t be able to deliver homes at the prices buyers will expect. Scott Megill, President of the Home builder’s Association of Chester and Delaware Counties, said, “I am just not going to be able to build their house at the price they expect. As a business owner, I can’t afford to absorb those costs for homeowners. If they want to finish their project at a reasonable price point, the time is now.”
So, if you’re thinking about building a new home or renovating your own, you need to act quickly to lock in your material costs. The market is calm at the moment, but this is only the calm before the storm. Once the shortage hits and everyone starts increasing their prices, you’ll be stuck waiting for the prices to come back down, or paying a premium for your upcoming project. Make sure that you get what you want from your home before you get stuck paying top dollar. Start your project now, and get your quotes for materials, before the prices surge.