Building Materials Shortages Holding Up Projects
Just the other day I was talking to a friend of mine who is a local builder. We usually don’t chat about business but he was telling me how many of his projects need to be put on hold due to the fact that he simply can’t get building materials for them. That means the contractors which he already hired will move onto another job and put his project on the backburner. What’s even harder is when he has to explain to the customer that operations must stop after putting down a significant amount of money for the construction. It sounds crazy that the money is there for building a new home but there is simply no material for the project. The only option is for the builder to go to a new supplier and spend more money on lumber and other materials. That’s where things get a bit complicated and the cost of the project will begin to increase which no one likes, not the builder, contractor, or home owner.
Why Is There a Shortage Of Building Materials?
The question is packed but I will try and address it and get to the crux of the issue. We are still in the midst of a pandemic and its lingering effects are now being felt in the building industry. The pandemic impacted global manufacturing of building supplies and production was slowed down. On top of that, city dwellers are moving to the suburbs and home prices have skyrocketed, stimulating a hot home buying market. As soon as a house is for sale it goes off the market that day. Where I live, home sales are being done undercover to prevent a bidding war.
Here is how it works: One of the neighbors gets word that a house is going up for sale. The seller is told that he or she has a very good offer and there is no need to put it on the market. The buyer comes in with a generous offer and the sale is done without anyone knowing. The home buying market is so intense that some buyers will even offer cash for the house. It’s crazy beyond anyone can imagine.
Besides for a hot home market there are other issues that have impacted global manufacturing facilities both at home and abroad. In the past year there have been hurricanes and freezes destroying manufacturing facilities in the United States. Overseas, the impacts of the tariffs are raising the prices and having an impact on production. To add more fuel to the fire, container shipping companies are sending empty containers from the United States to Asia to keep up with delivery demand from China. But the problem is that these containers that are heading inbound are empty with no building materials coming from abroad. The trade war is getting intense and each country is trying to protect themselves. As a matter of fact, the Port of Los Angeles for the very first time had received more empty containers than loaded containers. All these issues have created a builders nightmare here in the United States of America.
The Dream Of Building A New Home Is Nearly Impossible
Every American’s dream is to work hard and one day build a new home. Not everyone gets to build a new home but the ones that do look at it as a lifelong achievement where they can settle down and enjoy their family. Unfortunately, this is becoming more and more difficult with all the challenges that the building industry is seeing. According to HBA of Michigan, the cost of building a new home has increased by $36,000. In most cases that family has already estimated a project cost and has little to no room to maneuver. Added building costs will leave the dream of building a new home a fantasy rather than a reality. It’s hard for these people to accept the facts and they will either decide to purchase an existing home or continue living as a renter until the market begins to settle.
Customers Need To Speak Everything Out With The Builder
Before starting a project it would be wise to speak out all the issues that may arise and document them in the contract. This way you will have clarity on what potential costs you have to absorb if the contractor needs to spend more money on going to a new supplier in case of an emergency. The last thing you want is for the project to be stopped. That means the workers will be shifted to another job site and your home renovation will be put on that back burner. You want to have a good relationship with the builder and not scare them off with comments like “No way I am paying for that!”. Here is the deal, no one anticipated a building material shortage and the correct thing would be to share the cost with the builder. As a general rule of thumb, keep an open line of communication and things will work out. It’s a difficult time for everyone in the home construction industry and customers need to be sensitive to that. Always go into a project with your eyes open wide.
Builders Need To Think About Using Other Materials Besides For Lumber
So the customer said that they want this specific type of wood flooring for the living room. The contractor checks with the supplier and every wood color variation is out of stock and they have no idea when it will be coming back in stock. Contractors need to explore options that are more readily available and present them to their customers. Just last week a friend of mine who was opening up a showroom for bathrooms upgraded to interlocking floor tiles rather than wait on the laminate flooring that would first be in stock in mid September. In regards to dealing with the lumber shortage, builders need to think about using composites instead. This will help keep the project moving right along without increasing the project cost.
We Need To Stop Being Subservient To Global Markets
It’s not just in building supplies that we have felt the negative effects of being reliant on countries like China, it’s other industries as well. Just last year, in the midst of a raging pandemic there was a shortage of PPE products. Forget about common citizens getting a hold of masks, nurses were substituting trash bags for surgical gowns due to the shortage. The states were blaming the government and the government was blaming the states. Regardless of who’s fault it was a lot had to do with the fact that we were simply not able to ramp up production at home and had to wait for shipments to be flown in from overseas.
There needs to be a way through machinery to keep all manufacturing at home so we can meet the skyrocketing demand without increasing product cost. This will keep the economy more lucrative for builders and contractors while keeping the cost for construction of a home down. Purchasing “Made In The USA” has never been more important. Just like we rebounded from the great depression we will be able to come back stronger and more independent than ever. Stop blaming the government and start purchasing from suppliers that buy American made products. Government officials are not there to help the citizens anymore, they just are looking to park themselves there for fame and glory. True, they may help once and a while but they are not working on making the United States of America independent of relying on oversea imports. That’s why we need to support our local contractors, builders, and most importantly small businesses. Everyone knows that it’s the small businesses that make the U.S. economy thrive and big government is aware of that and afraid of that.
Besides the shortage in basic building materials like lumber and concrete the demand has resulted in shortages on other items like windows, siding, roofing, and decking. It may take some time before things return to normal and prices for home constructions become more reasonable. The long-term solution is not to rely on other countries for the materials and have everything made at home, right here in the old USA. But until then both builders and home owners can expect to spend more for their next construction project.
While you may be frustrated to hear the price on your next home improvement, keep in mind that this is just the tip of the iceberg in comparison to what builders have to deal with. Big projects from $75,000 to $1.5 million are getting canceled and the survival for many construction companies is dependent on completing those projects. When a project is canceled it has a rippling effect from the surveyor until the final touches by the landscaper. It’s good to hear that business in the housing industry is booming, the problem is that there is simply not enough building materials to handle the projects.