How is COVID Effecting Project Costs?

The recent months have led to a lot of volatility in the building and remodeling market.  Prices for materials like Lumber, Roofing, siding, and many other products we use in our client’s homes have spiked.   Due to a lot of factors in the past year we have seen some materials increase by 100% from the same time last year.  We have not seen this much of a swing in costs since Hurricane Katrina in 2005, but this time the issues are much more global and lasting much longer. How is this all effects project costs?

Will Costs Come Down?

Some homeowners are shocked at where pricing is now compared to over a year ago for similar projects, as are many of us in the industry. Our hope is things will even out, but as we have seen in the past once pricing goes up it may come down a little but often, we see inflation or other factors continue to affect those price increase.

Will the costs come down?  In the 20+ years I have worked in this industry we have not seen prices drop significantly, but we have also not seen some of the drastic increases that we have seen over the last year.  So, we do not know, if we were to base our answer on Historical data, the answer would be no, it will hopefully settle, but drastic decreases I do not believe will happen. 

Lumber Prices

Lumber prices continue to rise at an alarming rate, and we have seen it go up and down on a weekly basis over the past 8 months.  Some weeks it is slightly lower and other weeks it is up.  There are also other items that have not changed and will most likely have to increase in the coming months. 

Almar, along with many of our trade partners have worked hard to keep labor prices the same through the pandemic, but as the cost of living increases it will force the industry to come in line with the need to increase wages.   In an industry that already has a labor shortage, it will make it more important to keep the best carpenters and trades people in line with the cost of living.

Pre-Planning

As you work on planning your project here are some steps you can take to make sure you have good information before you finalize your contracts and scope of work.

• Make sure you have complete, detailed, and written proposal.
  • The bigger the project scope, the more detail you should see.
    • 2 pages is not long enough if it is a project with multiple parts to it.
      
• Is the contractor including you in the pricing discussion?
  • Be sure whoever you are working with on your planning process has a great working relationship with vendors and knows where pricing is. You do not want to get stuck because they created an unrealistic budget because they are unaware of what is happening.
    
• What selections can you make now so you can get good timelines and pricing?
  • Knowing the specific items, you want to include can allow us to get pricing and stay ahead of any known price increase.
    
• Have you considered cost-plus billing?
  • This may be a good idea, depending on when items are purchased you will get the most current prices.

While we have no idea, what will happen in the coming months.  Almar will continue to work closely with out vendors and trades contractors to keep us to date as much as possible with the increasing and ever-changing costs for renovation and remodeling your home.   Please call Almar today to help you with your remodeling project.

If you have questions about your home improvement project or would like more information, Contact Almar: https://www.almarbuilding.com (781-826-2577) and watch our videos: http://www.youtube.com/almarbuilding.

If you are looking for more information about how COVID has effected pricing in our Industry try these articles we found:
The Reality of Lumber Pricing in 2021 | Trinity Building Systems
New Residential Construction (census.gov)