You want to start a beautiful new home construction project, but from what you’ve seen on the news about supply issues and shortages, you’re thinking now might not be the best time, and you'd better tolerate whatever isn't working about your current home in the meantime. No one would blame you for that assumption, but it’s not necessarily the truth! To know whether or not now is the time to begin construction on your dream home, you need to understand what’s happening in the home-building industry, what’s causing it, and how it could impact your project.
After we dive in, you might want to consider downloading our complimentary home building guide for more information on the custom home-building process, or maybe check out our blog dedicated to construction timelines!
Over the past several years, there have been shortages of everything from groceries to cars to electronics and more. For homeowners and builders, shortages of construction materials, appliances, and labor have resulted in construction supply chain issues like shipping delays and bottlenecks. In addition, many construction materials have been discontinued, some without notification. Speaking from personal experience, this makes designing and pre-purchasing materials a real challenge. Even when we are able to find materials, lead times can be much longer, therefore, delaying the project start which could lead to increased material costs or a change in the sequencing of how your project is built.
According to the 2023-2024 Construction Economic Forecast released by the Associated Builders and Contractors (ABC), the outlook for residential construction remains positive for the foreseeable future. The report suggests that the demand for new housing will continue to grow due to factors such as population growth, low-interest rates, and favorable demographic trends. However, the ongoing supply chain disruptions and rising costs of construction materials have led many homeowners to invest in home renovation and remodeling projects, further driving the demand for construction services in the residential sector. Despite some challenges posed by labor shortages and supply chain issues, home builder trends indicate that residential construction industry will continue to see steady growth in the coming years.
The NKBA (National Kitchen and Bath Association) Market Outlook Report also indicates that building a custom home could become more expensive due to inflationary pressures on construction materials and labor costs. The report notes that demand for custom homes remains high due to factors such as changing lifestyles, remote work, and low mortgage rates. As a result, the custom home building industry is likely to continue to grow, albeit with higher costs and longer timelines.
Why is it Happening?
There’s no one reason for the building supply shortages and supply chain issues impacting the industry. It comes down to a number of intersecting societal, environmental, and economic factors: wildfires in the West, a slowing world economy, rising transportation costs, labor shortages, the pandemic, flooding in lumbering regions, and on.
The bottom line? If you're waiting for labor and material costs to fall, you'll likely wait for a very long time. Though you may see some volatile prices, such as lumber, slightly decrease in 2023, the general trend will likely be increased. The most important data for homeowners is the rate at which prices are increasing. While we can expect a more gentle slope as the cost to build a home in Georgia increases every year, we've not seen the last of construction cost surges due to the factors we've just discussed.
What Impact Will This Have on My Custom Home Project? What Can I Do?
The specifics of how conditions in the near future of the home construction market will impact you depend on your timeline, location, and the nature of your project when building your Lake Country dream home in 2023. However, you should always plan some ‘buffer room’ for delays and price increases of some kind. That doesn’t necessarily mean you should hold off on your home construction - or that these things are guaranteed to happen - but you should be aware of how shortages, delays, and rising costs could impact your project and, by extension, your life.
Timeline and cost are the two main areas of your project that could be altered by current industry conditions. The high demand for building supplies combined with shortages means that people are willing to pay more for smaller remodeling or new home construction. So, you’ll want to build an extra cushion into your budget for unexpected cost increases. While you’re searching for a builder for your project, ask how they’ve been impacted by supply chain issues if you want to get a better understanding of prices in your local area. Additionally, ask questions about how the status of your budget will be communicated throughout the project timeline, how your prospective builder will stay transparent about costs incurred, and what the company’s buyout process is.
Your builder also may have to deal with drawn-out lead times for construction materials, which could cause remodeling or new home construction delays. In addition to the potential complications, this poses for building, this may affect your timeline as you make alternative living arrangements during construction.
At the end of the day, the best thing you can do is consult with your builder to see what challenges they anticipate for your project. They can help you plan for delays and price changes, tell you which materials they are having trouble accessing, and recommend compatible alternatives.
What is PAXISgroup Doing?
At PAXISgroup, we believe in integrity, so we’ll always be honest with you about the supply chain challenges facing your project and what it’ll take to overcome them. In addition, PAXIS is committed to providing cost-effective solutions while doing everything we can to prevent delays from messing up your construction timeline. For example, if we’re having difficulty obtaining a specific material for your project, or if the price of that material increases, we’ll work with you to find an alternative material that more closely matches your budget and timeline.
PAXISgroup will also listen to your concerns and be forthcoming in communicating anticipated issues as soon as they are brought to our attention. As part of our commitment to our core values — customer-centric, intentional collaboration, unrelenting integrity, prioritizing people, perpetual growth, and intense listening — PAXIS builds meaningful relationships with our clients, collaborates with industry professionals, takes responsibility for our mistakes, and is always seeking to improve.