26 May Successful Building A Home In A Time Of Volatility
According to the US Census Bureau in 2021, construction costs experienced their largest increase in more than 50 years, and the recovery outlook in 2022 has been tempered by ongoing volatility. Labor shortages, supply chain issues, and record high lumber and other building materials costs continue to impact the market and lead many to put their plans on hold.
If you aren’t ready to give up on your building dreams (and we don’t think you should!) while waiting for market volatility to normalize, these tips can help you move forward with your plans in the midst of the chaos.
It is vital throughout your planning to approach decisions with flexibility. Flexibility will help you stay positive, keep your project moving, and keep disappointment at bay. Uncontrollable commodity costs may be able to be offset by changing styles, reducing the amount or changing the type of certain materials, changing exterior or interior finishes to less expensive options, or finding material efficiencies in the design.
Be prepared with contingency plans for every decision
During your selection processes, take thorough notes. Keep track of the options you liked but didn’t choose. Keep a record of options like fixtures and materials, noting what you liked and didn’t like about each one. That way, if prices on a final choice go up, you can refer to your other options and avoid having to start over. This also helps prepare you for the supply chain issues the market is currently experiencing.
Another way you can use contingency plans to your advantage is to plan on overages. Be sure to include a sizable contingency into your budget so increases don’t completely unravel your plans.
Timing is key
It’s important for your builder to be able to vet proposals early and get them signed quickly to lock in pricing. This means it benefits you to sign your contract and pay your deposit quickly.
Another area of timing that is vital is to place orders for materials that are experiencing supply chain issues significantly earlier than would be required in normal market conditions. These timing issues require high levels of organization and planning.
All of this brings us to our final and most important suggestion:
Find an experienced and reliable builder
A trusted relationship with your builder will aid you every step along the way. An established builder has key insights into pricing trends to help guide your budget and aid in any decision pivots along the way when a particular material gets too pricey.
Equally important are the industry relationships that a trusted builder has worked hard to establish. These longstanding connections with subs and vendors are more likely to lead to preferred pricing and timing priority helping you get fair pricing.
Dahl Custom Homes has the experience and long-standing relationships to help you weather this season of volatility. We are experts at custom home construction and would love to discuss your project in more detail.