House construction, improvement season framed by rising costs, demand | Top stories

The 2021 season for building and improving homes will be built on a foundation of uncertainty.

Prices are booming and / or volatile due to supply and demand, which means that project prices are difficult to pin down for many contractors. Some had to do some recalculation for their clients to deal with the uncertainty.

Bradford A. White, President of White’s Lumber & Building Supplies on North Rutland Street in Watertown, may have the best advice for anyone planning a repair, new home, or home renovation project in the coming months:

“Plan ahead and anticipate the unexpected,” he advised.

For example, a shortage of basic building blocks for home projects was reported a few weeks ago. Fasteners, nails, and screws were hard to come by.

Ken Palmer, purchasing manager at White’s, said the shortage was due to a lack of shipping containers.

In February, the CEO of Denmark-based Maersk, the world’s largest shipping container company, told CNBC that container companies were experiencing a “significant bottleneck” as resurgent global demand began to “stretch” capacity, which also drove freight rates up .

So those simple nails in your new deck or for that extra space can only add to the overall cost of these projects. But strap yourself for shock wooden stickers.

The price of sawn timber – from panels to plywood – has increased significantly.

“We have seen significant, almost dramatic, gains,” said Bradford White. “I think I would rightly say about historical price levels.”

“Lumber, even common lumber, has increased between 50 and 75 percent, sometimes 100 percent, from what it was,” said Elon R. Waugh, owner of Mighty Oak Construction in Lowville. “In some cases, plywood is twice as high.”

Last year, the COVID-19 pandemic slowed the economy, including the production of sawn timber in sawmills. Now supplies are getting tighter as the mills come back up and try to meet the increased demand.

A February 12 press release from the National Association of Home Builders said: “Spikes in wood prices not only annoy buyers during a period of high demand, but also cause many sales to fail and builders to be forced to postpone projects at the same time when homes are in stock are already at a record low. “

According to the NAHB, wood prices have risen by more than 180 percent since last spring. “That price hike has caused the price of the average new single-family home to rise by more than $ 24,000 since April 17, 2020,” the association noted.

At least two lawmakers, Rep. Jim Costa, D-Calif. And Jodey Arrington, R-Texas, have written to President Joe Biden urging him to look into the situation.

“The wood came in relatively on time,” said Palmer. “But lead times are increasing and some of these products are priced when they are shipped to us.”

Such unknown prices can lead to a recalculation of the project costs by contractors.

“All of my projects that I have planned for this year have been pretty much planned since last summer,” said Waugh. “So that means that I have to go through everything I have ahead of me this year and request everything. You cannot rely on material prices to be anywhere near your location. When I book things so far in advance, it’s always with the knowledge that prices for materials can change. “

Simon E. Lashomb, owner of Lashomb Construction in Potsdam, also informs his customers that project costs can fluctuate.

“People generally understand and people have been quite patient too,” said Mr Lashomb. “There weren’t many people who were difficult. People generally try to limit the unforeseen costs that may arise. But COVID was out of the blue with that. It was something that did not surprise the contractors. It surprised everyone. I think everyone was affected enough by it to be a little more empathetic. “

Rising home project and new home prices are being watched carefully by bankers including Thomas H. Piché, President and CEO of the Carthage Savings and Loan Association.

“We had a few designs last year and it was a bit scary because no one expected the total cost to increase by 35 percent, which has happened to a lot of people,” he said.

A 20 or 30 percent increase in project costs could have a significant impact on the bill for a $ 200,000 or $ 300,000 home, Piché said.

“Nobody has that in their budget, so we were very aware of that and were following things pretty closely. Many of our customers worked well because they had pre-contracts with contractors and they all somehow stuck to them. Then we had others who made some significant gains and we had to work with them. Like this year, we will look at things and make sure there is enough space where we can lend them more or that they have better reserves as construction projects are difficult at the moment. “

Mr Piché recommended getting pre-qualified for a rough estimate of the total cost of home loan projects and then selecting a contractor and getting some “hard numbers”.

“Then we work with the contractor and the borrower to make sure we have enough space,” said Piché. “Nowadays we make sure there is enough space for overruns as things are not as simple as they used to be.”

The rising construction costs, according to Piché, are exclusively related to supply and demand, not to rising interest rates.

“The interest rates are very good,” he said. “They’ve been up a little over the past few months, and we might expect another quarter, but they’re still in the middle of the three, which is still a very good rate.”

The pandemic has not put a brake on the desire for new houses or extensions.

“The last year – and I think any banker or real estate agent will tell you that – has been a boom. We doubled our business last year, ”said Piché. “It was crazy. And we’re seeing a pretty strong spring right now.”

Commercial firms also hit

Commercial construction companies are also looking at building material price increases.

Robert Porter, vice president of DC Building Services in Watertown, said that materials ranging from steel to copper wire to sheetrock have seen significant price increases.

“It seems like every two to three weeks things go up 10 percent, 10 percent and 10 percent,” Porter said. “Steel has increased by around 30 percent compared to the previous year.”

One project DC Building Systems is currently working on is expansions at Roth Industries and Global Plastics in Watertown. The products that the company makes here include double-walled oil storage tanks. DC Building Systems was contracted to build a 10,000 square foot warehouse and 7,000 square foot manufacturing facility.

The cost of many commercial building materials was “replenished” last April at the start of the pandemic, Porter said.

“It went back to normal in the summer. Now it’s exploding, ”he said.

Mr. Porter is unsure whether the fluctuations in the price of commercial building materials are due to supply and demand.

“We don’t really know what is causing this other than speculation with the new guidelines and so on,” he said.

Rising steel costs can be linked to tariffs the Trump administration is setting on Chinese steel, Porter said.

“All that comes is largely the US,” he said of steel products. “It kind of pushed this cheap Chinese steel off the market here.”

One way that DC Building Systems deals with price increases is by stocking up on products. For commercial projects, the cost is usually “locked in,” Porter said.

“I buy things in advance that I normally wouldn’t buy, like wire mesh – things that don’t go bad, but you have to buy them now, even though I might not need them until July,” said Mr. Porter said. “Better to have it now than to have it locked up for what it will cost you. Who knows what it will be like in July? “

Improve our environment

Mr Lashomb said his company has traditionally done a 50/50 split of the exterior and interior work. Since the pandemic, that formula has shifted to 75 to 80 percent of the indoor space as people spend more time at home. Kitchen and bathroom renovations are particularly in demand.

Mr. Waugh has seen a sharp increase in requests for additions.

“I have people who are planning to add additions to homes this year and next year,” Waugh said. “People are planning projects, I would say, probably twice as much as in the past year and a half compared to what I’ve seen in years past.”

Mr Waugh said notable price increases have affected things like siding and clapboard as well.

“Siding increases between 10 percent and 20 percent,” he said. “I’ve been told that shingles will rise by $ 6 to $ 10 per square foot.”

A square of shingles covers 100 square feet of the roof.

Mr. Waugh and Mr. Lashomb also had difficulty acquiring windows.

“You used to get windows in a week or two, depending on where you got them from,” said Mr. Waugh. “Now you see four to five weeks.”

Whites used some creativity to solve the supply problems.

“We’re using multiple sources that we’ve never used before,” said Palmer. “We may not have been able to get the same item from the same manufacturer, but rather a similar item that takes care of the contractor.”

According to Palmer, many vendors have reduced the variety of items they make in order to focus on their core products.

“This is similar to what everyone saw in grocery stores last spring and summer,” White said. “You’d walk down the aisle and choose between four or five different brands, but now you have a choice of one or two and the rest is just blank.”

With all of the fluctuations in price and dubious supplies of supplies, the best advice for people considering a home project might be to just wait.

“I think a lot of people expect material costs to go down in the next year.” Mr. Lashomb said. “I think a lot of people think that it only makes sense to wait.”

“Some people just wait another year for things to settle down, which makes sense depending on the project,” said Piché.

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