Get
everything you always wanted in your dream home. The right location, the right floorplan and
all the right upgrades...or settle for a resale home that almost has all you
want.
The
decision gets more difficult as the spread between the cost of a new home and
the cost of a resale begins to widen. Resales
can be very inexpensive due to foreclosures.
But they are also much riskier due to possible abuse by the former owner
and especially the potential of a hidden mold problem due to having the
electric turned off for a prolonged period.
Here
is a condensation of an article in the Orlando Sentinel that discusses the rise
of new home prices. This trend is
already taking place in Palm Coast as our new home builders begin to fill their
pipelines with orders. As I shop for the
right builder for prospective home buyers I see this happening first
hand.
Just as Florida’s new-home market prepares to finish its
strongest year since the housing slump, prices for drywall, cement and lumber are
fast outpacing inflation.
At a time when inflation is running about 2 percent,
lumber prices throughout the country are up 35 percent from a year ago,
according to the National Association of Home Builders.
The cost of interior walls for new homes has increased more than 14 percent from November 2011, according to a report released Thursday by Associated General Contractors of America. And suppliers of that drywall, also known as gypsum board, have put builders on notice prices may spike an additional 30 percent in the coming year.
“We did get notice the gypsum board would be going up a substantial amount, and we are seeing pricing pressure from other suppliers and from labor,” said Ken McDonald, president of David Weekly Homes’ Orlando division. “It’s a balancing act. We will be raising prices to cover the increases. We’ve been doing that this year.”
The pressure on prices is mainly the result of two things: rising demand from homebuyers eager to take advantage of record-low mortgage-interest rates, and supply problems because of the shutdown of manufacturing plants in recent years. In terms of demand, for instance, David Weekley Homes started 80 houses last year but expects to end this year with double that number.
McDonald said the price increases also reflect a home-construction industry that is trying to rebuild its profit margins, which were decimated by the housing slump and Great Recession.
“Pricing all went to an all-time low, and now business is trying to get their margins back,” McDonald said.
“I think it will slow the housing recovery, because new-home buyers are very price-conscious,” Basu said Friday. “What builders might do is move their product to be more upscale; affluent buyers are more likely to spend 5 (percent) to 10 percent more to get what they want. … Value-oriented buyers are more likely to purchase an existing home.”
Greg Hardwick, president of Hardwick General Contracting Inc. in Maitland, said a lack of skilled labor is also going to affect the new-home market in 2013.
“The thing that may get us next year is the labor. There is a huge theme throughout the industry that not enough masons, drywallers and framers are available to meet demands,” Hardwick said.
“We’ve lost a lot of that labor and those resources. They’ve gone to different industries, and now the demand is going back up.”
Copyright © 2012 The Orlando Sentinel (Orlando, Fla.) Distributed by MCT Information Services.
The cost of interior walls for new homes has increased more than 14 percent from November 2011, according to a report released Thursday by Associated General Contractors of America. And suppliers of that drywall, also known as gypsum board, have put builders on notice prices may spike an additional 30 percent in the coming year.
“We did get notice the gypsum board would be going up a substantial amount, and we are seeing pricing pressure from other suppliers and from labor,” said Ken McDonald, president of David Weekly Homes’ Orlando division. “It’s a balancing act. We will be raising prices to cover the increases. We’ve been doing that this year.”
The pressure on prices is mainly the result of two things: rising demand from homebuyers eager to take advantage of record-low mortgage-interest rates, and supply problems because of the shutdown of manufacturing plants in recent years. In terms of demand, for instance, David Weekley Homes started 80 houses last year but expects to end this year with double that number.
McDonald said the price increases also reflect a home-construction industry that is trying to rebuild its profit margins, which were decimated by the housing slump and Great Recession.
“Pricing all went to an all-time low, and now business is trying to get their margins back,” McDonald said.
“I think it will slow the housing recovery, because new-home buyers are very price-conscious,” Basu said Friday. “What builders might do is move their product to be more upscale; affluent buyers are more likely to spend 5 (percent) to 10 percent more to get what they want. … Value-oriented buyers are more likely to purchase an existing home.”
Greg Hardwick, president of Hardwick General Contracting Inc. in Maitland, said a lack of skilled labor is also going to affect the new-home market in 2013.
“The thing that may get us next year is the labor. There is a huge theme throughout the industry that not enough masons, drywallers and framers are available to meet demands,” Hardwick said.
“We’ve lost a lot of that labor and those resources. They’ve gone to different industries, and now the demand is going back up.”
Copyright © 2012 The Orlando Sentinel (Orlando, Fla.) Distributed by MCT Information Services.
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