Anyone building almost anything bigger than a doghouse should plan on cost overruns, some of them major — to the point of threatening completion of homes and businesses.
In recent months, prices of basic materials have increased beyond belief.
“Insanity” is how Marshall Bone, a longtime DeLand general contractor, described it.
“I’ve been at this since I got out of the Air Force in ’73, and I have never seen such inflation in construction materials,” Bone told The Beacon. “The worst is lumber. Five-eighths CDX plywood: the first of the year you could buy that for $22, $23. As of yesterday, it was $66.95.”
Those prices are for 4-foot-by-8-foot sheets; we talked with Bone on May 25.
By and large, contractors and their customers are willing to pay extra, as prices show no sign of leveling off.
The nonstop and increasing demand is now affecting availability, Bone said.
“We’re running into shortages,” he noted.
Lumber is but one commodity subject to wild swings in availability and price.
“We’re having shortages in electrical wiring, switches, plugs, meter boxes — everything. Air-conditioning equipment,” Bone said. “Roofing materials are up 40 percent for some materials — if you can get it.”
He added, “PVC pipe — that’s shot up.”
There is huge demand for building supplies, as buyers show they are willing to pay what the market demands.
“It’s tough to get essentially everything. Suppliers are not stocking stuff,” Bone said.
One factor affecting the prices, he said, is the increased cost of moving them as finished goods to wholesalers, and from there to retailers.
“Diesel prices are going up,” Bone said.
When truckers must pay more to pick up and deliver items, they pass along their higher costs to the end users.
Not least, on top of the upward spiral in the costs of materials, Bone said there is “a severe shortage of labor,” partly because of a reluctance of many to go to work.
“It’s hot out there, and they’d rather sit inside, play video games and get paid by the government to sit on their tails,” Bone said.
All these negative factors may affect the construction and real estate market, Bone warned, as prospective buyers become turned off by delays in finishing projects.
“I think you’re going to see a lot of disappointed buyers,” Bone said. And there’s no end in sight. “I don’t know when the construction craziness is going to stop. It’s taking forever to get something built. The owner is still having to carry that cost.”
Recovery from the economic lockdowns of 2020 is taking time.
“At the first of last year, when the pandemic hit, we had over $900,000 ready to go, and the owners called up and put it on hold,” Bone said. “We have since done about $310,000.”
“It’s crazy,” he concluded.