The Expert Podcast

So home prices continue to escalate and part of the reason for it is even though homes are being constructed by builders some of those builders are waiting longer to list those houses that are under construction and the reason why may have to do with practical reasons where the labor is not available to complete the homes or the materials are in short supply but sometimes the builders are holding back on prices because they're going up and if they figure if they wait an extra three four months they might be able to get an extra ten thousand dollars for the property.
Some of the reason for it is the fact that 15-20 years ago back in the mid-2000s when the housing market crashed a lot of builders contractors and specialty trades retired and got out of the business the housing bust created a low rate of new home construction a lot of smaller builders went out of business in the last couple years higher material cost makes it harder for builders to maintain profit margin without jacking up the prices well the prices are going up already so by waiting an extra month or two they might be able to realize that extra five or seven or eight thousand dollars is making that delay.
Here's where it gets into that another factor might be builders are waiting until the home is further along before they sell it giving them further visibility into the cost meaning that if you're just breaking ground you may not know what the lumber cost is going to be because you might have to buy lumber two months from now and it could go up three thousand dollars for your lumber package by waiting until the house is done to put it on the market and get a contract you'll know what your prices are.
In this day and age you don't have to lock down the house with a contract early on because you know it's going to sell even in a few months five six years ago the builder wanted to get a contract on that house before they broke ground so they know it was sold now it doesn't matter because they know the house is going to sell more homes are being built on spec without a guaranteed buyer because the properties are going to get sold regard regardless.
Builders might still not be close to sleeking demand but they will be able to profit from it even more meaning that they may not be able to finish enough houses to satisfy all the market but they will be able to make profit on the ones that they are selling it's from the wall street journal earlier this year and since then what we found is the labor portion of the construction is even more of a factor than the materials.
There's builders that have the materials they're on site they're ready to go but the labor is not available to complete the frame out dry in or even the finish work to get the house on the market but the builders don't really care because two or three months later they can probably sell it for a higher price than they could in today's market.