I’m curious for some of the pro’s opinion on this market. Have new home prices (i.e. price to build) come down any or are the builders still paying out a premium for material costs and labor costs?
I guess what I am asking is (and I know the answer always "depends), but if I had a floor plan last year that someone would build for 300K, is there any chance that same builder would build it for less this year? What about next year?
Also, the thing that I fear the most is if builders would use my construction loan (call me Peter) to pay for Paul’s construction and then one day tell me that they can’t finish my house because they are bankrupt.
Most materials are down, there isn’t as much of a scarcity right now.
Any builder that wouldn’t negotiate a better price right now either is very wealthy and does not need to work or about completely under and does not really want to work. Subs are hurting and cutting prices to just get work.
Unless you can check their financials and pay records (ie do they owe for the past six houses still or are they paid for) I would hedge to the Peter/Paul outcome. Also does the inventory they hold have a note on it, which means interest payments (I know one that this is really hurting now) Its an iffy situation for sure. Though there are a lot of guys out there that set it up right and are going to be the ones that come out of this on the better side.
Mark
Mako 262 Twin Yammaha F200s
Yeah, but do you consider a dog to be a filthy animal? I wouldn’t go so far as to call a dog filthy but they’re definitely dirty. But, a dog’s got personality. Personality goes a long way.
“Life’s tough…It’s even tougher if you’re stupid” John Wayne
Thanks for the input saltydog235. In general (ball park), how much cheaper (in terms of percentage) would one expect to build a house right now? For instance, do you think new construction has gotten 20% cheaper, etc? Any examples? I’ve seen some recently completed units drop in the neighborhood of 30-40% over the past year, but some of that is panick selling and I am guessing that new construction wouldn’t see as steep of a decline (since now builders undestand the risk better, etc).
You are seeing sell offs like that from builders with large inventories like production builders. I couldn’t tell you exactly how much of a reduction you could get as I am in commercial construction not home building anymore. If I had to guess from market trends I am seeing I would think a 15% reduction would be about right. People are running scared right now. I see guys working at cost just to get the jobs or leaving things off of bids to get the work hoping to change order it back in after they have started. I know of a recently bid fire station that had a low of 1.9 and a high of 2.4 million, thats 500K spread by 20 bidders. Somebody either has an in with cheap subs, left something out, or is taking a major cut in fee, or all of those things. If you have the money to build right now, you can probably get what you want at a reasonable rate. The bad thing is, I would wait a little longer because we both know it isn’t at the bottom yet.
Mark
Mako 262 Twin Yammaha F200s
Yeah, but do you consider a dog to be a filthy animal? I wouldn’t go so far as to call a dog filthy but they’re definitely dirty. But, a dog’s got personality. Personality goes a long way.
“Life’s tough…It’s even tougher if you’re stupid” John Wayne
skinneej
raw materials for construction; 2x4’s, OSB, CDX plywood, shingles, etc are about 1/2 of their July-Sept 07 peaks. Copper is still high, so wiring will cost more.
I’d bet on 15-20% less than this time last year. Existing home prices are off closer to 30%
There is nothing - absolutely nothing- half so much worth doing as simply messing about in boats. Kenneth Grahame
Thanks for the input fellas. I’m not quite ready to build yet, but I want to get my research in well ahead of time. I want to monitor things for a while and try to get a good deal in about a year or so. Hopefully the market will wait for me
Thanks for the input saltydog235. In general (ball park), how much cheaper (in terms of percentage) would one expect to build a house right now? For instance, do you think new construction has gotten 20% cheaper, etc? Any examples? I’ve seen some recently completed units drop in the neighborhood of 30-40% over the past year, but some of that is panick selling and I am guessing that new construction wouldn’t see as steep of a decline (since now builders undestand the risk better, etc).
Thoughts?
My best friend from HS is a builder and we discussed this less than a week ago. The figure he gave me was 10% less to build right now than a year ago. The wife and I want to build, but just like everyone else right now, we are weighing the pros and cons and taking our time to try and feel out what this economy does. You can still buy an already built house for a great bargain right now, so we’ll see how things play out. Of course the wife wants the dreamhouse perfect to the way she wants it, but who knows how things will work.
If you can afford to do it right now, and you have the approved financing taken care of, why not do it? You can get a lot more for your money today. Just my two cents.
I also know the banks aren’t necessarily loaning money for homebuyers even with good credit. I’ve heard several stories about married couples with both people working non-commissioned jobs (steady salary) and credit score over 700 that cannot get loans to build >$200K homes…sad really.
FloridaBoy’s right to have an opinion on any subject on CF.com has been revoked until further notice. Carry on.
You definitly get what you pay for is right! A lot of shady builders seem to be coming out of the woodwork these days. You want to pay for someting once and have it done right or pay for it 3 times untill it’s right.
a contractor can only cut so much and still provide a quality product.
many contractors have been bidding jobs at cost to try and hold on to their core group of skilled people.
but that can only be done so many times until further cuts have to be made.
where will the next cuts come from?
they will come from the allotted time for a job.
if i get paid 5k for a job that costs me 5k to do- i just worked for zero
next customer says if you want the work i’ll only pay 4.5k
you cant get custom home quality at tract home prices.
you’ll get what you pay for.
livin at the beach
I'm not looking for less quality work. It's the law of supply and demand. If the market is flooded with workers sitting on the bench, then you would think that you would get a better hourly rate per worker. I know it sucks for them, but eventually they will have a choice to either get paid less for what the do or have to find another career. They won't be able to all demand to get paid what they were when housing was booming and they were all employed.
In addition, I am hoping that supply and demand catches up with everything (timber, etc). So, I guess you could say that I am looking for a deflationary effect.
the market is flooded with workers who have already seen their wages slashed over and over as legit contractors try to compete with illegals who pay no taxes.no ins. and so on
15 years ago we got 75 per square for a tear-off and re-shingle.–that is now down to 25 per square. installing home exteriors is the same-so is masonry,
what other service do you pay 1/3 of what you paid 10 years ago?
how much should a skilled carpenter make?
how about that guy who did such beautiful brickwork for you?
maid services get 37.50 per hour with a 2 girl-4 hr minimum.
try to get 37.50 per hour for a skilled worker who can build your project from the ground up and you’ll get laughed out of the state.
so tell me–how much shou;d they be paid?
when was the last time you checked the hourly rate at a boat shop or auto dealership?
the market is flooded with workers who have already seen their wages slashed over and over as legit contractors try to compete with illegals who pay no taxes.no ins. and so on
15 years ago we got 75 per square for a tear-off and re-shingle.–that is now down to 25 per square. installing home exteriors is the same-so is masonry,
what other service do you pay 1/3 of what you paid 10 years ago?
how much should a skilled carpenter make?
how about that guy who did such beautiful brickwork for you?
maid services get 37.50 per hour with a 2 girl-4 hr minimum.
try to get 37.50 per hour for a skilled worker who can build your project from the ground up and you’ll get laughed out of the state.
so tell me–how much shou;d they be paid?
when was the last time you checked the hourly rate at a boat shop or auto dealership?
livin at the beach
"How much should they be paid?" is a great question with an EASY answer... They should be paid how much the market is willing to pay them. That's the problem with America. We have an expectation of what we are worth, but sometimes the market says otherwise. Look, I'm not a fan of a "salary cap", but I don't want to pay someone more money because THEY FEEL like they are worth it when I have a guy next to them that does just as good of work willing to take less. That's just called 'stupid'. If I want to make charitable donations, then I will call my local charity.
I think that you are trying to turn this into an argument and claim that I don’t want to pay money because I don’t think someone should make as much… But that’s not it at all. I just want to get the best price in a market that is starting to adjust to today’s prices. What workers made a few years ago is irrelavant.
have you taken a 30% pay cut? most construction workers have.
not trying to start an argument, just want people not connected to the construction business to realize what is goin on. they say " nobodys hungry yet" but we have been hungry for a while.
good luck finding what you want- i would be happy to give bids on any home exterior work or dock work. satisfaction guarenteed.
have you taken a 30% pay cut? most construction workers have.
not trying to start an argument, just want people not connected to the construction business to realize what is goin on. they say " nobodys hungry yet" but we have been hungry for a while.
good luck finding what you want- i would be happy to give bids on any home exterior work or dock work. satisfaction guarenteed.
livin at the beach
Actually I am glad that you asked that question. When I considered moving from Charlotte back home to Charleston, I came to a harsh realization and that is, the market that I was in did not pay the same down here. My employer at the time would not let me work remotely. I interviewed with a a few companies down here and called around a few more inquiring about positions, etc. In the end, the best salary that I found this side of Charlotte was still a 35% paycut from what I was getting paid. I made the decision that I couldn't live in Charlotte anymore even if it meant taking a pay cut. I went back to my boss and announced that I was leaving the company... But, wouldn't you know it, suddenly they decided that working remotely wasn't so bad after all. So, I got to keep my paycheck and move to Charleston...
The moral of the story… Sometimes you have to adjust your expectations even if it means giving up some money. I realize that it’s harsh, but I didn’t make up the rules. I don’t want anyone to “go hungry”, but I don’t want to overpay for things “just because”. That’s just the way the market works. Look at the housing industry. People have been overpaying for years and now prices have to crash down 40-50% in some cases. I can’t just tell a seller, “Yeah, but I bought my house for XXX, so you have to give me XXX”.
skinny- why not build your own house? if you dont have the necessary exp. then hire a full time constr. super and let him ride herd on everything. he can also give you a daily walk through and explain how and why things are done.
you control the money and pay the subs draws based on completed work after it has been inspected by the super. i’ve worked a number of home projects like that and they seem to work well. the owners said it saved them 20-30%.
I second that bad habit I agree 100% the home owner s paying for it he should walk it every day!!! from the grade to the hardware!!! I have installed floors in both situations and it seems it goes better when the home owner is the builder/super or at least involved!!!
