The Expert Podcast

Years ago, there was a big spike in expenses for the construction industry. These expenses were in the form of materials, pipeline and distribution problems, and labor shortages. There was also a lack of quality tradespeople and experienced construction workers. The remaining workers in the industry had higher salaries.

What has changed? What's the current status? Well, according to Pro Builder industry publication, material prices are still high, and building costs are still elevated. Year over year, costs went up another 1%, and lumber alone increased by 11%. This does not bode well for the housing market or even the construction market.

As a licensed general contractor, we see this all the time. More and more residents and property owners are weighing their decisions on whether to buy a new house, renovate their old one, or add to their existing home. At the lower end of the market, affordable housing remains a challenge.

Material prices continue to rise, and permitting costs are also increasing. One of the biggest costs of permitting is not just the price of the permit itself but the time it takes to secure approval. For example, if the permit process takes 8 to 12 months, each of those months adds carrying costs—such as property expenses, insurance, equipment, and staffing. Sometimes, the cost of these delays is even greater than the price of the permit itself.

There’s no quick fix to the challenges in the affordable housing market. Interest rates have been hovering in the mid-6% to around 7%, and they are not expected to change significantly anytime soon. Construction costs aren't decreasing, and labor costs won’t drop due to inflation. The biggest issue is navigating the regulatory process to secure permits and approvals—whether for environmental concerns, infrastructure, or other factors. No matter how affordable construction might become, if you can't get the project approved, you’re stuck before you even begin.

Thank you for watching! Remember, you can access live one-on-one personal consultations with licensed experts, including private investigators, commercial insurance brokers, real estate title examiners, certified civil court mediators, and licensed general contractors. If you need expert advice in any of these fields, click the link below to visit actualhuman.com and arrange a live, one-on-one consultation. We'd be glad to help!