Is Now the Right Time to Build? Exploring Construction Opportunities and Challenges
Download MP3 Current Sentiment in Home Building Industry
- Builders are hesitant and skeptical, fearing a housing recession.
- Home purchase volumes are declining, but prices remain relatively stable, with some areas experiencing minor fluctuations.
Why This Might Be the Best Time to Build
- Lumber Prices & Labor: Costs have decreased, and labor availability has improved due to less competition.
- Unfulfilled Demand: Millions of potential buyers still exist who missed out in recent years due to bidding wars and low inventory.
- New Home Advantages:
- Brand-new homes with no compromises appeal to buyers.
- Efficient construction methods and competitive pricing can create opportunities.
Building Strategy for Builders
- Avoid high-cost projects: Focus on homes priced around the median home price ($430–$440K).
- Aim for homes in the $340K–$400K construction range to ensure profitability.
- Use downtime between remodels and additions to prepare lots and start the permitting process.
Planning for Future Opportunities
- Backlogs for subcontractors like roofing are still significant (12–14 months), but these will erode over time.
- Begin groundwork: Secure properties, acquire permits, and start designs incrementally to be ready when opportunities arise.
- Medium-priced homes (around $400K–$500K) remain viable options for builders looking to stay active in the market.
Key Takeaway
- While the market appears challenging, strategic planning and efficient construction can position builders to capitalize on untapped demand and maintain steady work during slower periods.
