Homebuilder Comments in September: “Supply chain, supply chain, supply chain."
"Monthly price hikes no longer the norm. Some of the hottest markets sounding toppy."
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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:
#Allentown builder: “Supply chain is broken. Our best answer is to provide orders to trade partners 3-4 months in advance so that we receive materials on time.”
#Austin builder: “Availability of windows has limited closings this year & availability of appliances has caused closings to slide to a later month. Availability of paint is stressing Q4 closings & causing even more bunching toward late in the year.”
#Austin builder: “No end in sight for labor & material issues. Told by logistics guy last week that his company believes it will take at least a year to get the supply chain back to working.”
#Bakersfield builder: “Garage doors are most problematic, with always long lead times & back orders.”
#Baltimore builder: “Lumber costs dropped, everything else went up.”
#Boise builder: “HVAC equipment & garage doors are hard to get. Lead times for windows are now 4 months. Sales slowed sharply in September. Up until recently houses sold within a week after we listed for sale. Now listed houses are sitting with very little sales traffic.”
#Boise builder: “Several manufacturers are imposing immediate price increases, some requiring retroactive increases on product contracted but not delivered/paid for yet. Delivery dates of materials are not dependable (months behind in several cases).”
#Boston builder: “Costs are rising from mostly manufacturers, every 3 - 4 months.”
#Charlotte builder: “Continues to be unstable with supply & manpower.”
#Dallas builder: “Supply chain has gotten much worse in last 60 days. Costs are out of control. Lack of labor is driving most of the cost issues. Need demand to drop before things will change. Labor costs continue climbing each month while quality continues decreasing.”
#Denver builder: “Not just cost, it's availability. No reliable schedule on cabinets right now. Other products are hit & miss. Every aspect of the supply chain is a mess right now. 70% of lumber cost decrease in Q3 was offset by cost increases from other trade categories.”
#FortWorth builder: “Seemingly every week we face a new allocation, shortage, or delayed delivery.”
#Greenville builder: “Windows have a 16-week lead time. I-joists & trusses have a 12-week lead time. Some appliances are back ordered 3 months. Paint materials are back ordered 4 weeks.”
#Honolulu builder: “Supply issues are increasing. Lead times are increasing for various products. Shortages & lack of supply create a need for substitutions.”
#Houston builder: “Price plateau only sustained by ultra-low rates. If rates move up 50 bps, builders should get ready for very slow sales without significant help from commodity suppliers, manufacturers & labor. Unable to forecast or manage labor costs.”
#Jacksonville builder: “Not expecting construction cost pressures to get any better in 2022!”
#LasVegas builder: “There is something different about the market. Sales are still there, but sales agents are having to work a little harder for sellers than they did the first half of the year.”
#LosAngeles builder: “It sucks. While I'm sure certain costs have increased due to COVID-related matters, certain suppliers & subcontractors seem to be gouging.”
#Louisville builder: “Supply chain disruptions are a daily challenge even when issuing purchase orders months in advance. Don't see anything improving on these fronts.”
#Minneapolis builder: “Costs have stabilized but we're still having to substitute materials due to backorders, shortages, etc.”
#Nashville builder: “Supply chain on hardware & glass shower door supply is erratic.”
#OklahomaCity builder: “No multiple offers. Buyers aren’t coming out as much as they did in spring. Inventory starting to build up.”
#Philadelphia builder: “Even though lumber has come down from being up by 400%, every other item in the house has increased.”
#Phoenix builder: “As a market, we definitely pushed prices to the point where demand is starting to thin.”
#Reno builder: “Unfortunately, we see lumber increasing again currently.”
#RiversideSanBernardino builder: “Our costs along with delays have taken a huge chunk of our profits. But the hardest part is the lack of predictability.”
#Sacramento builder: “Hit the price ceiling in most of our communities. Rolling out greater incentives to get buyers back in the door.”
#SaltLakeCity builder: “We stopped sales for 4 months. Now opening up some but limited & finding much more buyer resistance at higher prices.”
#SanAntonio builder: “Availability of labor & windows are more of a challenge than rising costs at this point.”
#SanDiego builder: “Cost & schedule mayhem. No other words for it.”
#Seattle builder: “Biggest issue is getting the right sheen & product lines for Sherwin Williams paint. Shower glass doors/safety glass. Windows were 2-3 weeks normally, now taking 11 weeks. Don’t anticipate subcontractors holding the line on not passing on labor cost increases.”
#Tampa builder: “As a luxury builder, we’re receiving larger % price increases than national builders, who have greater control over pricing through contracts & advance commitments. This has always been evident, but the magnitude seems to have increased over the last year.”
#WashingtonDC builder: “Lot availability, delayed community approvals, material availability, & labor issues are artificially slowing sales. Most communities with few constraints continue selling at very high volumes.”
#WestPalmBeach builder: “Land is more expensive, so even though home prices are much higher, we’re not making much more from a margin percentage standpoint once you factor in land & vertical costs. Land sellers don't understand just how much costs have risen.”
#Wilmington builder: “Lumber costs stabilized, but we’re all waiting on trusses. Once trusses arrive, we may see an uptick in lumber & panel prices.”
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