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Homebuilder Comments in December: “Still a ton of demand for new homes"
“Costs are through the roof!”
Some homebuilder comments courtesy of Rick Palacios Jr., Director of Research at John Burns Real Estate Consulting (a must follow for housing on twitter!):
Here is Rick’s summary of builder comments for various markets (emphasis added in bold):
#Atlanta builder: “Have virtually no available inventory & huge backlog of 1,000+ units going in to 2022. Still metering sales in most communities, where the demand of waiting buyers still outnumbers our supply.”
#LasVegas builder: “Busiest orders for December I can remember in a long time.”
#Charlotte builder: “Haven’t seen this hot of a new homebuilding market in 27 years in Charlotte. Reminds me of the go-go days in the late 1980's right before the S & L's (Savings & Loan Crisis) rocked my new homebuilding world in Southern California.”
#Oakland builder: “Still selling out of every phase as soon as we release homes for sale.”
#SanDiego builder: “There hasn’t been an elevating cost environment like this for ~40 years. Anyone who says otherwise is delusional. If home price increases were less it would be brutal.”
#SanAntonio builder: “Framers are accepting jobs & then demanding more money to actually do the job or they walk. Concrete delivery causing delays in scheduling pours due to lack of drivers. COVID seems to be causing short term labor issues throughout our contractor base.”
#Jacksonville builder: “Costs are through the roof!”
#Orlando builder: “Shortage of materials & labor in almost every trade. No negotiation on bids.”
#Tampa builder: “Debt-to-income ratios are getting out of line for even the above average family to afford new construction. Trade base is stressed beyond max. Quality of construction is what keeps me up at night.”
#Sarasota builder: “Continue to see lumber price increases, appliances on backorder, & HVAC units/systems delayed.”
#Chicago builder: “Garage doors have tripled in cost & lead time is 24 weeks.”
#Stockton builder: “All trades are looking to pass along wage increases. Most product manufacturers are announcing material increases of 5-10% in the new year.”
#WashingtonDC builder: “We’re at the point where we can no longer offset cost increases with price increases.”
#Boston builder: “With a 1-year backlog, we’ve proceeded cautiously to allow time between releases for price increase purposes.”
#Bend builder: “Don't list homes until nearly complete due to volatile materials market & availability. Production has slowed immensely due to lack of hardware (garage doors or cabinet doors, paint, lumber, appliances, HVAC items).”
#RiversideSanBernardino builder: “National builders are buying & warehousing supplies, which strains available product. Everything is on a boat in harbor with no estimate of timing. GE representatives are getting harder to get a hold of. Garage door costs have roughly doubled.”
#RaleighDurham builder: “Expect YOY cost increases to be the same in 2022 that we saw in 2021.”
#Wilmington builder: “Supply chain is still disruptive, delaying offering homes for sale.”
#Knoxville builder: “Costs were already spiraling, then most subcontractors & vendors raised them again effective 1/1/22. No cost pressure relief in sight.”
#Tucson builder: “Windows are being significantly delayed. Brick pavers are hard to find.”
#Austin builder: “Lumber is expected to go back up significantly this year. Being told factories are still not operating at capacity & tariffs aren't allowing solid competition to provide relief.”
#FortWorth builder: “Lumber pricing ready to skyrocket in January. Looking like a repeat of 2021.”
#Houston builder: “Build cycle time increases in all areas (engineering, entitlements, development, permitting, home construction, inspections, etc.) will likely have impacts in early 2022 until supply chain & labor availability stabilizes.”
#Dallas builder: “Consistent cost increases as well as supply issues creating a challenge getting our backlog built & causing margin erosion. Expecting lumber to hit above 2021 pricing.”
#ColoradoSprings builder: “Costs are still rising & ability to pass along increases to buyers is likely going away. Expect gross margins to decrease in the 2nd half of 2022 & in 2023.”
#Phoenix builder: “Margin pressure is getting difficult.” THE END