Wednesday, January 26, 2011
At the bottom?
Bad news for people waiting for the bottom to build. Costs are going up. We are a member of a buyer’s coop that provides purchasing power to help lower our construction costs. I reviewed the lumber comparisons, and lumber costs have risen locally around 7.3% over the past 12 months. This was a comparison from January 2010 to January 2011. One of our foundation subs said that steel went up 10% at the beginning of this month, and is expected to go up another 10% at the beginning of February. Copper has been climbing, which affects everything from plumbing to AC equipment. Gas/diesel price increases impacts transportation and delivery costs. Some of the subcontractors were not passing through all of the cost increases because it was slow. However, things are picking up, and the cost increases for materials is getting too high to cover them with out passing them through. I would expect costs to continue to rise. The amount of the increase will depend on the local and world economy, so I am not about to guess on that one.