Log Blog

Building Materials Costs On The Rise in 2013

Clients ask if now is a good time to build. They see reports of recessionary pricing on existing homes in some markets and get lulled into thinking that excess housing inventory in some states universally means lower prices. For the Custom Home consumer, most homes are built and budgeted on a "cost plus" contract. As demand for construction materials rises, so do prices. For some it may be build now or never to avoid rising raw materials costs. . According to ENR-Engineering News Record "The housing market in January was up 22% from January 2012's level as the market continued to gain momentum after posting an annual gain of 15% for all of last year, according to the U.S. Dept. of Commerce. The rebound in housing is pulling up lumber with it. ENR's 20-city average price for the most commonly used species of 2 X 4s increased another 0.6% in March, marking the seventh consecutive monthly gain and pushing prices 13% above March 2012's level."

According to BNi - Building News, after 6 years of recessionary costs on items like Gypsum Board (dry-wall) and Sand & Gravel (needed on concrete foundations) prices have seen a steady 4-8% rise over the past 12 months. Lumber costs are already up 8% and Millwork up 6% over 2012 prices These are expected to continue to climb as demand continues. During the recession years of 2007-2010 many of the lumber yards and other raw materials suppliers were forced to close their doors. New suppliers have not yet entered the market to replace them. This revived demand is driving the prices up. Natural disasters such as Hurricane Sandy also caused an abnormal bump in demand as the East Coast attempts to rebuild. A press release from International Wood Markets Group in December of 2012 stated "North American lumber prices forecasted to soar in 2013 and reach record highs I 2014. The new 5-year outlook shows that supply and demand conditions in wood products for the long awaited super-cycle are now taking hold, with the full impact still some 3+ years away."

PVC pipe, Vinyl Floor coverings, Adhesives and Sealants and other materials made from petroleum products also continue to rise due to the higher cost of crude oil. Insulation costs seem to be climbing due to high demand by consumers recognizing the value of Energy Efficiency. Even for building material products that have not experienced a direct price increase, the suppliers are adding "fuel surcharges" and other hidden fees to battle rising costs of insurance, transportation and other overhead.

If you are thinking of building a Custom Home in the near future, don't wait. The sooner you lock in your lumber package and other raw materials the better.

Download 2013 Building Cost Trends Below:

http://www.dcd.com/pdf_files/1301trends.pdf
http://www.dcd.com/pdf_files/1209trends.pdf

 

 

We Service the Following Counties in Colorado, USA : 

Breckenridge & Summit County – Frisco, Silverthorne, Keystone, Copper Mountain

Vail & Eagle County – Beaver Creek, Avon, Edwards

Steamboat & Routt County

Winter Park & Grand County- Granby, Frasier

Fairplay & Park County

Leadville & Lake County

Evergreen & Jefferson County- Golden