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The Current State of Construction

1/11/2022

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When COVID-19 first appeared in the United States in early 2020, I assumed that it would be gone in a few months.  I never suspected that two years later, we would still be dealing with it and its ramifications for the building industry.

In March of 2020. when businesses were shutting down in the area, I received calls from two of my clients saying that they were putting their projects on hold, at least for the time being, due to the financial uncertainties caused by COVID.  I worried that business was going to dry up.  However, it wasn't long after that that I started seeing a surge in calls and emails from prospective clients who wanted to do remodels or additions, or build new homes.

For a variety of reasons, the residential building sector has been booming for much of the last couple of years.  I think that there are a few reasons for this:
  • As adults have worked from home and children have been learning remotely, families have felt the need for more space.
  • More time at home has led people to see things that they would like to change about their homes.
  • New home construction has not kept up with demand.  During the Great Recession, some builders went out of business, never to return.  There has also been less interest among young people in working in construction, leading to a shortage of labor to replace builders and subcontractors as they retire.  In some areas, zoning laws and NIMBYism have reduced the supply of available land to build upon.   In the last couple of years, material shortages, delays and higher costs have slowed down the building process or caused people to put off construction of their projects until availability and prices settle down.
  • The lack of existing housing related to demand has caused existing home prices to rise, at the same time that there is heavy competition for the few houses that are for sale.  Some people are giving up on finding a different home to buy and are instead choosing to change their existing home to better meet their needs.

The increased interest in home building and remodeling continues to this day, at the same time that it's harder to build because of the longer delays and higher costs of some materials.  Material costs have come down from their pandemic high but are still higher than they were pre-COVID.  There are still long delays for some materials, making it necessary to order some products much earlier than before.

I'm hopeful that material prices and availability will eventually settle back down to something close to "normal".  In the meantime, it's wise to start planning a building project well ahead of time, as architects and home builders are getting booked up farther into the future than before. 
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