With our supply of existing homes so low, a lot of buyers are looking at new construction as their best option to buy a new home. In recent months, we've helped and had numerous conversations about new construction with both Tri-Cities buyers and buyers coming in from other areas.
The good news is that our local builders are doing everything they can to build more homes and help narrow the supply shortage. But they're also facing delays due to a factors outside of their control. Here's a look at two of the biggest challenges homebuilders are experiencing today and how they could impact your plans to move up.
Skilled Labor Shortage
Builders are having a hard time finding skilled labor. That means they're working short-handed, further dragging out construction timelines. Odeta Kushi, Deputy Chief Economist at First American, says this is an ongoing challenge for the industry:
"The skilled labor shortage in the construction industry is not new – it's been an issue for more than a decade now."
But there is good news. The February jobs report shows employment gains in the construction industry. Kushi puts this encouraging news into perspective in the article mentioned above:
"Overall this was a good report . . . The supply of workers continues to fall short of demand, but the underlying momentum of the labor market recovery is strong, and falling COVID case counts provide further forward momentum."
That means, while finding workers continues to be a challenge for builders, there are signs of positive momentum moving forward.
Supply Chain Issues
Another hurdle builders are dealing with is the lack of supply of various building materials. You've probably heard about lumber problems, but that's not all. According to a recent article from HousingWire:
". . . Nearly everything needed in the homebuilding process is facing some sort of delay and subsequent price increase."
The article explains many other supplies are impacted too, including roofing materials, windows, garage doors, siding, and gypsum (which is used in drywall).
The difficulty in getting these items is dragging out timelines for new homes as builders wait on what they need to finish construction. And since materials are in short supply, even when they do get the product, the principle of supply and demand is driving prices up for those goods. HousingWire explains it like this:
"When supplies are low, charges inevitably go up, . . . Meanwhile, a lack of availability is causing huge delays, meaning builders are struggling to stay on schedule."
The National Association of Home Builders (NAHB) puts it this way:
"Builders are grappling with supply-chain issues that are extending construction times and increasing costs."
Because of these supply chain challenges, many builders are waiting to put a sale price on their new construction until the homes are nearly finished.
How This Impacts You
When you weigh your options and try to decide between building a home or buying an existing one, factor the potential delay in new home construction into your decision. While it doesn't mean you should cross newly built homes off your list, it does mean you should consider your timeline and if you're willing to wait while your home is being constructed.
If you're not sure which option is best for you, drop me a note with any questions or just tell me when you want to chat. Together we can make sure you know what's happening in our local market so you can confidently decide what's right for you, your priorities, and your timeline.
-Cari
