(SUPPLY) CHAIN OF FOOLS & THE NEWS FOR HOMEBUYERS Construction Costs & Supply Shortages
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any words in our COVID vocabulary have dwindled, however, supply chain is and will continue to be pervasive for the months to come. For those of you who somehow haven’t been affected by this system, the supply chain is the process our society has created to get goods from production to our front doors. Computer parts, refrigerators, furniture, toilet paper, and even soy sauce have all been affected in the past year and a half and magnified by COVID-related disruptions. In addition to the scarcity of resale home inventory, inventory overall has been negatively impacted by the construction industry’s challenges in building new homes. Sourcing and affording building materials has hit the building industry hard, slowing the construction of much-needed new inventory for homebuyers. Building materials aside, finding qualified labor to build the homes is an ongoing issue as well, one that predates but has been made worse by the pandemic.
Finding qualified labor to build the homes is an ongoing issue. And at the very end of the supply chain, you will find REALTORS® and their clients. “With supply chain delays and shortages, builders just cannot build fast enough,” said Aurora REALTOR® Sunny Banka. “Resale homes in the 80019 ZIP code of Aurora boasts at least a 15% increase with the median price of $542,000. Due to the costs of lumber, labor, and materials, new home prices have risen at a much faster rate. The main delays for new home construction are finding the materials and the labor. The media has touted increases in lumber prices by 300 percent, but there are many other building materials that have seen up to 50% price increases: In June 2021, this included steel mill products, building paper, asphalt, and plastic pipe. Fertilizer; laminated veneer lumber; resin and plastics; metal joists and rebar; wood windows and doors; and copper pipe were up 40%. Overall, buyers are paying about 30% more for new homes, mostly because these materials are hard to source, according to Ted Leighty, CEO for the Colorado Home Builders Association.
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