High demand for housing leads to low supply of building materials

0

It’s not just wood that’s hard to come by, the president of the Berkley Building Company said it’s hard to find steel plates for trusses, labor and land.

BOISE, Idaho — With housing prices continuing to skyrocket in Treasure Valley, an economist doesn’t need to see that the laws of supply and demand are in full swing. Low housing supply and high demand to call Idaho home are driving up housing costs in the Gem State.

While building more homes is an obvious solution to address the lack of inventory, builders in Treasure Valley told KTVB that it’s not so simple as the supply of building materials dwindles and the demand for new homes are increasing across the country.

It’s not just wood that’s hard for builders to acquire, the president of the Berkley Building Company says it’s hard to find steel plates for trusses, labor and field.

“We do our best to meet the demands, but there are so many things against us,” Jenna Englund told KTVB. “When you can’t get wood, you can’t build a house and that’s the reality. So if we don’t have the materials, the labor and the land, it’s impossible to respond at the request of Treasure Valley at this time.”

Due to the shortage of building materials, labor and land, Englund explained that the time frame to build a house is getting longer.

“If we think it will take three months to build a house, it could take two more months because we just can’t find people to meet our schedules,” they said.

Rod Givens, the owner of Alturas Home, said the entire planning and construction process has essentially doubled since the Valley’s housing boom began.

“Five or six years ago it could take six to twelve months to buy land, develop it, get it and be able to build and I think it takes a few years now to get that process through,” he said.

Brighton Corporation owner David Turnbull also told KTVB that it is taking longer than in the past to build new homes.

“So we’re looking for processes that are over a year old when they were able to do them in a build cycle here, in a season,” Turnbull said.

The 31-year-old industry veteran said homebuyers will feel the brunt of rising costs.

“There’s not much we can do about that, we can look at substitutions and better ways of doing things, maintaining quality but making sure that we do it in the most competitive way possible, but in at the end of the day, the consumer pays for it,” he said.

Turnbull added that shortages in most areas of the industry stem from the lack of staff at many companies, which has “overwhelmed” agencies “and the whole development structure is now operating at full capacity.”

Treasure Valley’s current housing problems didn’t happen overnight, according to Givens, who grew up in the construction industry.

“It clearly goes back to the previous recession, when many entrepreneurs really left the market and never came back. We have labor shortages,” he said.

Jon Hastings, CEO of Tresidio Homes, analyzed that the cost of lumber to build a home has more than doubled from $30,000 a year ago to $82,000 today.

“It’s a dramatic increase and it affects the price of the home and buyers,” Hastings explained. “The challenge for buyers is that they see those prices go up and builders see their costs go up so much that builders are reluctant to commit to sale prices at the moment until homes are more advanced. “

Englund told KTVB that the current housing market “is so crazy” and the upfront costs before construction begins are also expensive.

“If I price a house today and by the time I move in to build it because I got my permit and I have the labor and we’re ready onwards, the house could cost us another $20,000 and in many situations more than that,” she says.

Because of this, Berkley Building Company changed their model and no longer accept construction work because they don’t know how much it would cost.

“So we’re building our houses and launching them on the market when they’re more advanced and we have a good idea of ​​when we can finish and the cost,” Englund explained.

Alturas Homes also plans to build fewer homes due to uncertainty surrounding the cost of supplies needed to build them.

“From builders I know, we’d like to build more homes and there are caps on our ability to provide the supply that the market really needs right now,” Givens said.

This ceiling on what builders and developers can do with limited supplies is felt by new owners, like Nicole Bell and her partner.

They built their home and closed it about a month ago and they too have had to deal with their fair share of delays due to shortages, such as flooring and tiling in their home.

“We’re still missing cabinet handles, our lighting isn’t even fully installed, just whatever was in stock that they put in place in an effort to get an occupancy permit,” said Bell at KTVB. “We were trying to get out of our house, the house we were in, I sold it in October and it was just delaying our buyer moving in and it was just a domino effect. It was just a long process.”

Now the couple are still waiting for their fence to be built. However, she also watches her neighbors face even more serious delays.

“A month ago they laid all the foundation for the driveway or the foundation, but you haven’t seen the concrete people come in and pour in yet and they’re waiting and waiting,” she said. .

For builders, until the supply of construction materials catches up with the demand for houses, they will have to continue to be creative, change their models, attract more workers and work with other builders and Idaho Building Contractors Association.

“There have been shortages of materials, there have been shortages of concrete and lumber, but none of them with all the factors that are affecting our industry right now,” Givens said.

Hastings added that the shortages have also impacted windows and appliances like microwaves.

Builders said they hope shortages will ease as things start to reopen and that will help them build homes. They also pointed out that they were not making more money from the rising cost of houses, because the cost of labor and land had also risen.

Discover the latest news on growth and development in our YouTube Playlist:

https://www.youtube.com/watch?v=videoseries

The Daily 7:

Register for the KTVB Daily 7 E-mail newsletter and never miss the best stories from Idaho.

Share.

Comments are closed.