Is it worth building now? Construction materials cost.

[Daddydavesr86]

I had plans to have my pole barn built last year.
I worried about job security cut ot at work and did not want to spend all of my savings.
This year feel little better about spending the money. Just worried about increase cost of materials and curious if i wait another year go down.
Contractor's in my area extremely busy. All ready 2 months before they can get started this year.
Im in versailles ky.
Last year builder quoted 24x32x12 18500.
Thats concrete, escavation, insulated roof, one man door. As many frame outs for garage doors, windows as i want.
I have not got a quote of what building cost this year yet.
If its just 1k i could probably swallow that but much more i had have tough time.

Just curious what the anyone else with plans this year is doing .

The shop strictly hobby. Not using for a business or anything like that.
Other than always wanting shop there is no hurry to get built just growing in patient because always wanted detached garage.

Thank you

 

[kaymccampbell]

Couldn't hurt to ask. Then sit tight if the answer's ridiculous. I betcha this year they say $60K.

 

[theoldwizard1]

Lumber prices are still high.

 

[67CarGuy]

I'd wait, if you can. I imagine that prices will slowly come down as the year progresses, as vaccinations continue to get administered and more people can work safely.

 

[sixty4]

2x4 used to be $5 (or less) Paid $9 (and change) today, wtf!

 

[joey1320]

I'm building a 12' x 8' lean to and putting the list together on Home Depot's site, I'm about to puke.

 

[finn]

And next year you’re going to be one year older.

That’s a year that you’re never going to get back.

Your quote I’d dirt cheap, by the way.

 

[vavet]

I paid $42/sq ft for a basic structure in 2017. That was concrete, one man door, one 16 foot garage door, vinyl siding, and one window, and very basic electrical.

Excavation, brick facade on the foundation, asphalt, 12 foot ceiling, and upgraded electrical were all extra.

 

[blwn31]

I built my added on (24x28x9 with stepped trusses for a lift) garage onto my house, I did everything except the concrete work and the gutter/downspout here in the Sac region of California and it was $24K seven years ago. So, if I farmed it out you could easily double that price....

Keith

 

[greg13]

That's not much more than what mine cost last summer with all doors & windows and dong all the work with my brother. Supply prices will drop about as fast as gas prices - never!

 

[octanefam]

Here in the Pacific Northwest prices are off the chart. My GC has been building for 39 years and normally sees an increase or decrease every 90 days. In the last 45 days he has had 4 increases. Trusses had doubled in the past 6 months.... This has of course put my project on HOLD.

 

[PWC Repair]

My opinion is......HELL NO! Wait, the bubble WILL burst and materials will go way down.

 

[nadogail]

As long as the yards keep selling lumber at their current prices to builders who are booked out far in advance, IMHO, the prices will not move any direction but up.

Should we see a serious economic disruption, again IMHO, just bend over because a "Dream Shop" will be a phantasy.

 

[Showkey]

On a similar vain..........do you think gasoline is going back to $2.00/gallon any time soon because it’s in a bubble ??

The building and remodeling biz had huge bent up demand, then add Covid and stay a home and make my home/work place more comfortable/useful, then add crazy low interest rates........so no building prices are not going down anytime soon.

Same for existing home sales, days on the market to sell, new home starts........all up it most areas. The bubble word is way over used.........markets always move up and down. Bubble implies it’s going pop and drop over night.

Building permits trends are regional on the rate of up tick but lumber pricing is US market.

Link to building permits trends and history by area, region, state, city, US.......
https://www.census.gov/construction/bps/historical_data/

Many areas a builders are talking year long waiting list for new home builds and large remodel. If half of those contracts never start there’s still a waiting list.

 

[NUTTSGT]

If you don't want to touch your savings as whole or in part. Did you consider borrowing against your home while rates are low ?

Everybody has to weigh their own options and what works for them.

My addition cost way more than it should have and does make me sick to think about it. I quit looking at the receipts and only looked at the CC statements that I was writing checks for every payday.

 

[vavet]

I think materials costs might come down, but it will be slow and not much. The suppliers have found a new normal for what the market will bear.

 

[jollygreengiant]

I'd wait, if you can. I imagine that prices will slowly come down as the year progresses, as vaccinations continue to get administered and more people can work safely.

My opinion is......HELL NO! Wait, the bubble WILL burst and materials will go way down.

As long as the yards keep selling lumber at their current prices to builders who are booked out far in advance, IMHO, the prices will not move any direction but up.

Should we see a serious economic disruption, again IMHO, just bend over because a "Dream Shop" will be a phantasy.

I think materials costs might come down, but it will be slow and not much. The suppliers have found a new normal for what the market will bear.

While I agree with many of these posters that there is a bubble in materials costs that will burst, I don't think it's going to for a while. Lumber futures on the CME are still pretty close to their highs of last year (about 2.5x the average 2-3 years ago) and they are up again as I type this.

What we need to pop this bubble is a drop in the housing market or an economic downturn, which are 2 things the powers that be don't want to happen. Even interest rates going up by 1% would be enough to cool off this market IMO but I doubt that will happen, especially when some countries are staring to offer negative interest rate mortgages.

In the meantime I'll keep my fingers crossed and wait for lower prices. We had planned on doing an addition on our house but already delayed that into next year.

 

[PWC Repair]

On a similar vain..........do you think gasoline is going back to $2.00/gallon any time soon because it’s in a bubble ??

Gas will go back down in the fall again.........as it always does.

 

[Falcon67]

Wind just tore part of the roof off daughters house, we're going to see what prices are - had ours replaced two years ago. OSB is $35 sheet here, I'm not inclined to build anything right now.

 

[dcg9381]

Last year builder quoted 24x32x12 18500.
Thats concrete, escavation, insulated roof, one man door. As many frame outs for garage doors, windows as i want.
I have not got a quote of what building cost this year yet.
If its just 1k i could probably swallow that but much more i had have tough time.

It's going to be more than $1k more. Framing materials are up 100%, steel up 60%, concrete up marginally.

My guess: A recession will correct the market, but who knows how long that's going to be.

Long term -things don't get cheaper, so over time, it's going to sort out... You might have to wait a decade or two if you build at the wrong time.

Can't time the market.

W
What we need to pop this bubble is a drop in the housing market or an economic downturn, which are 2 things the powers that be don't want to happen. Even interest rates going up by 1% would be enough to cool off this market IMO but I doubt that will happen, especially when some countries are staring to offer negative interest rate mortgages.

I agree with Jolly completely.

 

[Daddydavesr86]

Thank you all for your post.
I will post the new cost once builder get backs with me.
I dont think prices will go down soon.
If prices go down it will go down slow.
Not sure.

 

[Hunt2871]

I talked to a builder about this issue and was told that material prices, as high as they are, are only driving the cost of new house construction up by about 10%. Labor is the same, dirt is the same, just lumber is crazy. Some quick perusal of the NAHB the average lumber package for a new home in 2019 was about 6% of the price of the home and about 6.4% in the price of the same home in 2020. It is now nearly 11.5%. On a average price of $280K or so....the same house, in 2020, was around $260K so the material costs accounted for about $17000 of the material costs and this year will be about $32000....bad enough but at the end of the day only about a 6% increase in material costs in the cost of the house. If you had a quote for $20K or so last year, even on a garage where the cost is almost all lumber and labor, you are probably looking at what, $25K this year? The bigger problem may be availability of labor and material at any cost.....low interest rates are creating havoc in new home starts and the industry is upside down to the tune of 1.5 million more pre-qualified buyers compared to inventory over the next 6 months. That means there are 1.5 million people in the market right now, pre qualified, who will not be able to find a home available for at least 6 months....and its been that way or worse for over a year.

 

[Evilunclegrimace]

Personally I would pass on any building plans right now. 7/16 OSB is currently $35.35 a sheet,23/32 OSB is $51.38 a sheet. 1/2 Pine plywood sheeting is $47.98 a sheet, 23/32 pine sub floor plywood is $ 51.07 a sheet.
A year ago PT 4x4x8' was under $ 6.00 today they are 14.98, down from $ 18.00 a piece. Unless you have an extremely flexible budget I would advise anyone to wait and see if prices do not come back down in the future.

 

[BK777]

Wind just tore part of the roof off daughters house, we're going to see what prices are - had ours replaced two years ago. OSB is $35 sheet here, I'm not inclined to build anything right now.

I was just at a HD in Oregon the other day and their OSB sheathing was over $50! I about had a heart attack as I'm getting ready to build a shed myself. Maybe.

 

[eastbaysubaru]

I know it's probably only a small drop in the bucket in terms of current/ongoing building, but the wildfires out here in California seem to have contributed quite a lot to the increases in lumber costs. There are THOUSANDS of houses being rebuilt and there's no seeming end in sight. Labor is also incredibly difficult to find. My father is building a fairly large house here in Sonoma County and the material costs are astronomical.

-Brian

 

[James-W]

If it were me, I would wait to build anything right now. I am helping a friend remodel a house he owns that renters had trashed. The price of wood building materials is extremely high priced and to make matters worse, the quality of the wood is NOT very good. Some of the 2X4's and 2X6's are really warped to the point they are unusable and certainly not worth taking home. My friend has to look thru a whole pile of them just to find some that are half-way decent. To have to pay premium prices for low quality materials is not in the buyer's best interest.

I realize that if you wait another year you will be a year older and still not have a workshop. But if you build it now and pay a lot more for it than you normally would have to pay for it, I would say that is not a sound economic decision. Yes, you will have a workshop to use at your leisure, but at an extremely high cost.

I guess it all depends on what means the most to you. Is a workshop at any cost more important, or do you put more value on getting something for a fair price?

 

[finn]

If it were me, I would wait to build anything right now. I am helping a friend remodel a house he owns that renters had trashed. The price of wood building materials is extremely high priced and to make matters worse, the quality of the wood is NOT very good. Some of the 2X4's and 2X6's are really warped to the point they are unusable and certainly not worth taking home. My friend has to look thru a whole pile of them just to find some that are half-way decent. To have to pay premium prices for low quality materials is not in the buyer's best interest.

I realize that if you wait another year you will be a year older and still not have a workshop. But if you build it now and pay a lot more for it than you normally would have to pay for it, I would say that is not a sound economic decision. Yes, you will have a workshop to use at your leisure, but at an extremely high cost.

I guess it all depends on what means the most to you. Is a workshop at any cost more important, or do you put more value on getting something for a fair price?

Problem with the wait it out strategy is that there is absolutely no guarantee that material costs will come down in a year, or even five or ten years.

Same goes for labor. Any reduction in costs during the last recession were temporary, and disappeared two or three years after the crash.

My opinion is that the only thing that will reduce construction costs long term is technology change. New materials, more modular construction. Anything to reduce labor. Houses and other small structures like shops are still built like they were in my grandfather’s day, back in the thirties, 90 years ago. There has been some movement, ie not many shovels on the job and more pneumatic nailers, but there is still a lot of low hanging fruit. The labor back then didn’t drive 80k pickups either.

 

[stevied916]

I built my added on (24x28x9 with stepped trusses for a lift) garage onto my house, I did everything except the concrete work and the gutter/downspout here in the Sac region of California and it was $24K seven years ago. So, if I farmed it out you could easily double that price....

Keith

Do you have a recommendation for a concrete contractor? We are in the planning stages of a detached garage in the area.

 

[James-W]

Problem with the wait it out strategy is that there is absolutely no guarantee that material costs will come down in a year, or even five or ten years.

Same goes for labor. Any reduction in costs during the last recession were temporary, and disappeared two or three years after the crash.

My opinion is that the only thing that will reduce construction costs long term is technology change. New materials, more modular construction. Anything to reduce labor. Houses and other small structures like shops are still built like they were in my grandfather’s day, back in the thirties, 90 years ago. There has been some movement, ie not many shovels on the job and more pneumatic nailers, but there is still a lot of low hanging fruit. The labor back then didn’t drive 80k pickups either.

You are correct, there are certainly no guarantees the cost of building materials will come down in the future. But by the same token there are no guarantees they will stay this high either. In the final analysis, if the opening poster wants the workshop bad enough, he will spend whatever it takes to get the workshop built. I would not build it right now, I would wait awhile to see what happens with the cost of building materials. But what I think is of no consequence, it is only what the opening poster thinks that matters. If he wants to spend the money then he can have it right away. Or, he could wait awhile and maybe save a few thousand dollars. Then again, he may not save anything by waiting. The future is uncertain and I don't have a crystal ball. Well, actually I do, but the batteries are dead and new batteries have been discontinued.

 

[GoodStuff]

I am a general contractor in Versailles, Ky. Would love to give you a quote. Been building for 30+ years. Prices are not going down anytime soon... but neither are home values so the return is still positive - and financing is cheaper than anytime in history. Just had a customer secure a HELOC at 2.25%. Send me a message and I will get with you


Sent from my iPhone using Garage Journal

 

[TTMotorsports]

I know some guys who family own a lumber yard. They said prices to their top builders have gone up 40% and sales qtys of lumber is up even at that. They said raising the prices 40% still makes them less profit than before BUT keeps the customers happy so that's fine with them. I know a guy who got locked in on a shop a month before lumber jumped. The builder had to do it for the locked in price but said he wouldn't do it for that little profit ever again and quotes would only be good for 30 days since before it was 90 days and that guy lucked out and contractor stood by his quote but got screwed in the process.

 

[imjustdave]

Got some pricing for a fence...
4x4 is over $17 and that's the smaller one a Jumbo aka full dimensional 4x4 is $21

I live in the Seattle area and pricing for homes is stupid. good friend is a realtor and sales are getting multiple offers in a few hrs with most waving all contingencies some getting offers that are 20 30 50 100k over ask.

IF your selling you can do well. I'm not sure this trend is going to stop anytime soon either. I'm not sure if we are near the bottom or if we are near the top, I just know building is going strong here and getting a contractor is near impossible.

 

[justanengineer]

I would get a slab poured and curing so you can be ready and financially recovered to do the rest when prices crash hard in a few months. There’s a big excess of RE on the market atm with commercial dead due to small businesses closing and residential values starting to fall bc millions are out of work and speculators’ notes are coming due. I like to judge RE based on how many cold calls I get from realtors looking for buyers, in good times it’s none, atm it’s 2-3/week. On the plus side, industrial stocks are going nuts atm due to inflation, Im making ~5% most days


Sent from my iPhone using Tapatalk

 

[Brly]

I got permits approved last summer for a 32x44 detached garage/shop. I cleared trees and did the rough grading last fall so I would be ready to dig the footer this spring. I've been agonizing over whether to proceed or wait out the lumber prices and need to make the decision soon. I've been saving for years so I can build without a loan and I'm there, just really unfortunate timing. Tough call for me. One of my concerns is if I put it off this year, how long will it be until I get back to it?
At this point I plan to get the footer poured, lay up the frost wall and back fill. I'll be building it myself, so I don't have to worry about scheduling contractors. If things get worse I'll let it sit. Really don't want to do that though.

 

[Montucky]

I don’t see a recession happening in the near future at all. Especially with the economic stimulus package for COVID. Also people are ready to work and have been for a while.

 

[240sxguy]

I got permits approved last summer for a 32x44 detached garage/shop. I cleared trees and did the rough grading last fall so I would be ready to dig the footer this spring. I've been agonizing over whether to proceed or wait out the lumber prices and need to make the decision soon. I've been saving for years so I can build without a loan and I'm there, just really unfortunate timing. Tough call for me. One of my concerns is if I put it off this year, how long will it be until I get back to it?
At this point I plan to get the footer poured, lay up the frost wall and back fill. I'll be building it myself, so I don't have to worry about scheduling contractors. If things get worse I'll let it sit. Really don't want to do that though.

From what I have read, concrete seems to have been somewhat stable. If I needed concrete work done now and could afford it I think I'd move forward with at least that portion of the build. Once that's done you can assess whether or not you want to begin the build portion.

 

[gte718p]

I can easily see prices being up for 5-10 years with major rebuilding around the country due to fires, floods, and tornados combined with a market where transportation is squeezed by COVID.

I guess the question is what value do you assign to having a shop vs not. In terms of home value it is generally a losing battle, so we are talking your own person enjoyment and opportunity cost.

I am very bless that I don’t worry much about money, so I can say this. You only get to live once. If the shop is what brings you enjoyment and happiness in life, I wouldn’t wait.

 

[mepstein]

If you will be using the building for 10-20 years, a couple grand doesn't make much difference in the long run.

 

[Brly]

I agree with what you guys are saying. I've saved more than needed to build the shop, even at current prices. I ran a rough comparison the other night to see how much more it will cost me and came up with just under $5000. I'm sure it's a bit more than that, but I can live with it. Been wanting a shop for years, have the money saved and the site prepped. Still a tough pill to swallow.

 

[RangerSVT]

I'm in the same position and decided to pull the trigger and just build now. It's way more than I want to spend, but I don't see costs coming down anytime soon. I currently pay rent at a couple different locations just to store my vehicles. I'll take what I pay in rent and apply it towards a low interest HELOC and at the end of the day have a shop at home that is mine instead of vehicles tucked away and inaccessible.