From the Ground Up

How to Navigate Rising Material Costs

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The real estate and construction industry had a very newsworthy 2020, and it continues to make headlines into 2021. The increasingly high demand for housing, in addition to the rising cost of materials, especially lumber, has caused the prices of single family homes to rise significantly.

All lumber related products (material needed for framing a home, trusses, sheeting, trim, and doors) have increased in price over the past year, some by as much as 250% year over year. The rising prices of these materials in addition to increased labor costs and labor shortages have created an unprecedented situation in the housing market.

Recent cost increases end up being an additional $7 per linear foot in lumber packages. And recently, the May futures contract price per thousand board of two-by-fours jumped from $32 to $1,326. That increase triggered the circuit breakers and halted lumber trading for the day. 

Lumber is not the only material that is getting more expensive. The construction industry is also facing an increase in the price of electrical material, because of the scarcity of copper. This semi-conducting metal is in short supply because it’s a natural resource, but it’s also seeing high demand in sectors outside of construction and homebuilding. The demand for copper is seeing massive increases in the data, tech, and communication sectors. Goldman Sachs noted that “copper is the new oil”. 

If you’re already in the process of building a new home, know that construction cost increases and material shortages aren’t specific to your builder, they are happening industry wide. A lot of builders around the country have capped sales, or stopped selling unbuilt homes altogether to keep their costs down. Homebuyers might be limited to less home inventory, which can result in competitive building wars and high sales prices.

How can Elon Homes help you navigate building a home during this time?

With limited inventory, low interest rates, and the lingering effects of COVID-19 on home buyer’s minds, many people are choosing to build homes on their own land. This can be a great option to avoid competitive bidding wars on limited inventory. Check out our free guide to finding your own land to build on here!

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If you’re thinking about building a new home, here’s how Elon Homes can help guide you through the process during this crazy time in the housing market.

  1. Utilize our relationships: Elon Homes has strong relationships with vendors, which means that any savings will be passed onto you to minimize costs when possible. You’ll receive high quality materials and finishes at the lowest prices available.
  2. No hidden costs: If you already have a lot in mind, we don’t mark up land or site development costs. Or, if you haven’t purchased land, we can help suggest lenders and guide you through the process. Additionally, at Elon Homes we don’t hit you with surprise costs. After we’ve decided on your floor plan and planned out the design of your home with your budget in mind, we’ll make sure your budget is maximized to get you your dream home without breaking the bank. We take our time when it comes to pricing to make sure all the details you’ve dreamt of are properly accounted for.
  3. Transparency: When it’s time to finally start the building process, we’ll keep you well in the loop and make sure if any delays or issues come up, you are aware and can adjust your plans accordingly. We’ll work hard to get you into your dream home as soon as possible!
  4. Post-construction services: When your beautiful dream home is finished, it doesn’t mean we are! You’ll have the usual final walk through before closing, but you’ll also have a 90 day and one year walk through to ensure everything is how you imagined it without issues. If you have any concerns or issues to address, we’re here to help.

Contact us below if you have any questions or would like to set up an appointment to start the building process!

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