Companies tied to housing revising guidance due to supply chain. Commentary from our builder survey this month indicates things getting worse before they get better. Homes sitting, waiting for materials (dead days). Big delays in windows. Delta outbreaks. In sum, a crapshoot. 🧵
#Nashville builder: “It's a crap shoot. Some municipalities will issue permits in 1 week, & others are 6-9 months behind. Supply chain is a mess. Windows are now 7 months out, cabinets are 6 months out, etc.”
#Chicago builder: “Build cycle increased due to backordered materials including bathtubs, appliances, & ceramic tile. Trades are much more limited in availability & now have some ‘dead days’ with no activity.”
#Columbia builder: “2 biggest constraints have been truss capacity & window timelines. Went from foundations sitting to now framed houses that are waiting on windows. Next big concern is cabinet manufacturers.”
#Knoxville builder: “One municipality won’t let us pass mechanical/electrical/plumbing inspection until windows are installed, but windows have been on backorder for weeks. Homes just have to sit.”
#Phoenix builder: “Houses are just sitting versus progressing each day. Almost every trade is taking longer to perform their task than they did the month prior. This is based on increased starts without increased labor to match.”
#LasVegas builder: “Supply shortages are getting worse.”
#Denver builder: “Entire supply chain has been disrupted. Main supply issues include trusses, cabinets, tempered glass, & appliances. Labor supply at the trade level continues to be a challenge. Trying desperately to protect our year end closing projections.”
#SaltLakeCity builder: “Appliances are always late, cabinets & windows are 16-18 weeks late. Had to change light fixtures to ones we can get.”
#DaytonaBeach builder: “Window delays the biggest contributor to delays.”
#Jacksonville builder: “Many months of delays due to truss manufacturing problems, both COVID outbreaks closing the plants, & steel shortage for engineered plate productions. Window & sliding glass door manufacturing delays having most effect on cycle time.”
#GrandRapids builder: “Constantly increasing lead time with suppliers to make sure products arrive reasonably close to on time. It is a construction nightmare.”
#KansasCity builder: “Simply not enough trade base to keep up with increase in home starts.”
#Columbus builder: “Certainly expected supply chain to be well on the way to recovering, but at this time, the frequency & duration of disruptions has not significantly eased or improved.”
#WashingtonDC builder: “Cycle times from foundation to completion remained relatively unchanged until ~3 months ago when supply chain for many materials started to experience extreme disruptions. Lead times for many materials & supplies are increasing dramatically.”
#Boston builder: “Used to build & close a house in 4 months from purchase & sale. Now takes 6 months.”
#Richmond builder: “Lead times for some materials & supplies increased dramatically. Constantly adjusting schedules & processes to address but experiencing rolling increasing. Problems are moving from one material or supply to another weekly.”
#Seattle builder: “Had to find replacement material or close homes without some items to be installed as we get them.”
#RiversideSanBernardino builder: “Inspectors & trades slightly slower to respond. Due to supply shortages, we are now storing product on site earlier in the process.”
#RaleighDurham builder: “Getting materials such as I-Joist has been a major factor in delays.”
#WestPalmBeach builder: “Most increases in cycle time are due to supply chain issues. Truss allocations & window lead times are biggest issue. Window lead times are up to 24 weeks and they still don't hit that date.”
#FortWorth builder: “Labor shortage in literally every trade.”
#SanAntonio builder: “Delta wave hit our labor force hard last month, delaying most closings.”
#Houston builder: “Build cycle increased 25%+ in the past year, with biggest impacts coming in the past 4 months. Labor an issue more recently, particularly masonry. Production cycle is longest in many years.”
#Austin builder: “Nothing is fast. Shortages of parts & pieces in each stage. More work than labor to do it all, meaning it will just take longer to build a home. I don't see an end to it. It's the new normal unless a major overhaul of the way we build is made.” THE END

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More from @RickPalaciosJr

2 Sep
Just surveyed ~400 pro remodelers. Top 4 themes: 1) Big remodels all the rage; 2) Many remodelers are booked until 2022+; 3) Product lead times & labor shortages still bad (see chart); 4) Homeowners fixing & staying put, not selling. Commentary from across country to follow…
#Texas remodeler: “I can’t grow with 20 week lead times on basic products. I started asking my suppliers what products are easiest to install. I don’t have enough labor to spend more time installing a touchless faucet than absolutely necessary.”
#Texas design-build firm: “My clients are essentially flipping their homes, but they aren’t selling. They want something fresh & new.”
Read 10 tweets
20 Aug
Just surveyed 6,000+ real estate agents across country. Top themes from our 1st ever RESALE agent survey: 1) Buyer fatigue, w/rumblings of remorse. 2) Bidding wars a bit less bonkers. 3) Cash is King & ton of investors. 4) Inventory gridlock. Commentary across country to follow…
#LosAngeles agent: “20-minute allotted home viewing time slots with offers due next day by noon, & buyers are asked to give up every contingency under the sun.”
#NYC agent: “Luxury home buyers feel the market is overpriced & have backed off.”
Read 24 tweets
19 Aug
Doing monthly review of our macro housing/econ 350+slide deck. Five charts grabbing my attention for August:

1/5: Home price appreciation finally leveling off. Blue line is our national index, which appears to have peaked at +20% YOY last two months.
2/5: Similar story on new home prices according to builders we survey across the country. Rate of YOY price increases tapering off a bit in July at +19% YOY.
3/5: Our Google apartment search proxy keeps hitting new highs. No real seasonal blip so far in 2021, which is showing up in crazy rent growth figures currently.
Read 5 tweets
6 Aug
Analyzing July new home trends from our just published monthly builder survey. Top 3 themes: 1) Frenzy phase for housing is over, but still solid demand. 2) Fewer builders restricting sales. 3) Hitting price ceilings in more markets. Commentary from across the country to follow.
#Austin builder: “Builders are starting to offer incentives again to drive traffic and sales.”
#Dallas builder: “We have hit price ceilings in the majority of our submarkets.”
Read 21 tweets
26 Jul
Land is the most important yet least transparent part of homebuilding. To help, here’s commentary from land brokers across the country per our July survey. Top themes: 1) Builders going further out for deals. 2) Bigger land deals are back. 3) Development delays & lot shortages.
#SaltLakeCity land broker: “You can't get all the lots you need even when you overpay.”
#SanAntonio land broker: “Getting a vaccine approved took less time than getting land entitled.”
Read 17 tweets
15 Jul
Today's Fed Beige Book updates on housing sound familiar...

#Atlanta Fed
#Dallas Fed
Read 4 tweets

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