If you were considering building, I surely don’t think there is a better time than right now to do it. Why? The Materials Cost Index continues to show declining prices in just about all major components of a building project. The main “ingredient” in building is lumber and no product has fallen faster. Whether it is drywall, insulation, steel, plywood or electrical and plumbing fixtures, they are all tumbling in price. The only products holding steady are oil-based materials such as asphalt shingles or vinyl siding and concrete and concrete blocks.
What about labor and subcontractor costs? Those have fallen just as quickly as lumber prices. It is all based on supply and demand. When everything was sailing along smoothly in the construction industry, there was enough work going around that no one was trying to be very competitive in their bids. That has completely changed and some companies are bidding jobs just to keep their employees busy.
You still need to be careful about always taking the lowest bidder. The old saying “you get what you pay for” usually rings true and this is no different. There are very few of my subcontractors that I will change based solely on price alone and I value the trust that I have in the ones that I have built relationships with. I would rather pay a little more for someone to run my electrical service and know it is done right rather than try to save a couple hundred bucks for a job where corners were cut in order to still make money because the bid was so low.
Are you considering the rates too? With 30 year fixed rate mortgages hovering around 4.8%, you could save yourself ten’s of thousands of dollars over the life of that loan. With inflation coming sooner rather that later, don’t expect this to be mortgage rate in a year from now.
One thing that builders and consumers can all appreciate in times like these is the quality of laborers is increasing everyday. Companies and subcontractors that were just getting by, doing work that is less than desirable and just plain dishonest, those are the ones having to find a new area of “expertise” outside of construction. It makes it easier on all of us and I heard a saying that I like to use, “When the building industry takes a downturn, it’s like taking a rusty pipe and beating against a wall and all the junk and flakes falls to the ground”. Meaning, your well trusted, honest and high quality people hang around and the ones that aren’t get knocked out of business and find something else to do.
Materials, labor and Rates are down and the quality of construction is up. Doesn’t get much better than that!
