Analyzing June new home sales & pricing figures from our monthly builder survey. As one builder noted: “It’s not fun to be a builder anymore.” Lumber relief is nice but pick your poison on other issues. Market commentary from across the country to follow...
#Richmond builder: “It's not fun to be a builder anymore. Cost pressure is killing us. Not only will builders like myself who take 12-24 months to build a house lose margin from increases, but the affordability is becoming a major issue.”
#Atlanta builder: “Costs have driven up prices & we’re no longer preselling. We will not sell a home until frame stage, so our sales numbers are off for June while awaiting framing stage.”
#Jacksonville builder: “Home buyers are more sophisticated than in years past, watching & understanding commodity prices. Some buyers have paused their house searches waiting for the decreases in hopes builders in turn lower prices.”
#Sarasota builder: “We are feeling some buyer hesitancy because of significant price increases & timing. We can't start a new buyer's home until February 2022.”
#WestPalmBeach builder: “Cost increases are still coming in daily. Materials continue to be delayed coming on site. Cycle times are increasing as much as 50%. Windows & trusses remain the biggest issue.”
#Chicago builder: “Haven’t bid a new project this year as cost increases are too great to be competitive in the infill spec market. Doing remodeling work until things settle down.”
#Indianapolis builder: “Major concern is ability to develop enough lots to supply the market. Pipe shortage & labor shortages by development contractors are creating a bottleneck.”
#Charlotte builder: “We would not let our sales team sell during the month of June. We needed to take a "pause" from mid-May to the end of June to let our design and construction teams get caught up.”
#Wilmington builder: “Sales slow as we are not offering product for sale until we have our costs set. Delivery times for trusses are now 15 weeks. Drop in lumber prices could be partially due to truss availability. Builders can't purchase lumber until trusses delivered.”
#Knoxville builder: “Only reason we have such a slow sales rate in June is we have nothing to sell. We are no longer listing any new starts for sale until drywall is in.”
#Nashville builder: “Lumber supply including Truss joists, I-joists, glue lam beams, & oriented strand board are restricting starts & sales.”
#Sacramento builder: “Severely disrupted supply chain & supply shortages are causing us to change specs to more expensive products.”
#RiversideSanBernardino builder: “Shortages are creating many "go backs." Subs have caught on and are increasing labor to cover "go backs." It's hell right now to finish a home in a proper manner. Subs have reached capitulation.”
#Portland builder: “Lumber theft is a big deal. Thieves are now stealing staged material on 2nd floors of homes under construction.”
#Bend builder: “Sherwin Williams told us they are out of exterior base paint until later in July. Appliances must be ordered 6-9 months in advance. Seeing signs of price ceiling, namely upper end of market.”
#Philadelphia builder: “Cost increases are out of control. Scary to think delays will keep our houses sitting waiting for trusses/lumber & siding. Windows just got extended to 15-17 weeks out. Short staffing of contractors is a problem too.”
#Austin builder: “Might have seen a peak in lumber but labor is going to explode & create huge bottlenecks due to all the starts over the last month. Skilled labor is going to be a huge issue.”
#Dallas builder: “Hard to get lumber, windows, air conditioning coils, etc. Air conditioning coils are in short supply and many are backordered, causing delays in getting inspections.”
#FortWorth builder: “Experiencing windows, brick, & now paint shortages. Some prospective buyers have put off purchasing to see if prices will come down.”
#Houston builder: “We’ve seen roughly $8-10K on average of cost increases each month for the past 4-5 months. Lumber has been the key cost driver, but plumbing, electrical, insulation, & virtually every other component has also increased much faster than historical levels.”
#SanAntonio builder: “Sales rate dropped only because we cut off new sales. We are selling too fast & burning through our lots. As of now, we are only selling spec homes. Otherwise, our sales pace would still be increasing month over month.”
#ColoradoSprings builder: “In addition to higher costs, we have had delays in construction & are questioning our ability to hit our closing numbers, despite strong sales.”
#Denver builder: “While lumber is beginning to come down, we anticipate a number of increases in other product categories. Starts exceed sales because we’re waiting to release homes until we have at least ordered lumber & know the cost.”
#SaltLakeCity builder: “Our cameras see theft almost every other night. Getting price increase letters at least weekly. Everyone is taking advantage of every crisis they can. Plumbing supplier said COVID has caused a 75% decrease in production because of being short staffed."
#Phoenix builder: “Appliance back orders through General Electric are still a major issue at closings. Cost of plywood still out of control. Shortage of labor, & especially qualified workers is getting worse. HVAC is the farthest behind labor & material trade.” END OF 🧵
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