Increased building costs... Thoughts?

dpusaSeptember 12, 2012

Folks, I'd like some help. Our builder has sent the first draft of the contract and has stated that costs have gone up (market conditions) based on the estimates they used to build the same house next door around 6 months ago but closed last week. It is a 4000 st ft home.

Here is the rundown.

A) Lumber Increases $6,000

B) Install sidewalk (20ft and retaining wall per City's revised position $4,000 (albeit this is would cover both homes)

C) Prepare house for ejector pump due to rock $4,000

D) Drywall Increases $2,500

E) Electrical/Plumbing Increases (copper)$3,000

Total$19,500 based on the home next door which sold for $700k.

It seemed highly excessive to us, but wanted to get the experts to weigh in on each.



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I was shocked to see a huge jump in plywood and OSB prices recently. I'm in the middle of building a house, so I see the pricing often, yet this took me by surprise. OSB, a standard commodity in home building, went from $7.50 a sheet to $12.00 a sheet. I also think that in some areas, home building is getting pretty active again, so prices that have been held down for some years now are starting to move up again.

The increase you noted is less than 3%- Have you priced food lately?

    Bookmark   September 13, 2012 at 6:15AM
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Flgargoyle. Thanks for the perspective - It is opinions that I am seeking so that helps. I understand prices increase I guess I was surprised at the $ amount in addition to if adding an ejector pump and associated labor is really $4k etc.

Other experts, any other thoughts welcomed.

Thanks Ursula

    Bookmark   September 13, 2012 at 9:44AM
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Housing market is increasing slightly raising prices (supply and demand), Hurricanes in the gulf increase oil prices (think gasoline increases) all building products are affected by oil prices either thru manufacturing or distribution. I am surprised he did not tell you that roofing was going to increase as well.

    Bookmark   September 13, 2012 at 9:48AM
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Beth Parsons

Our lumber package cost increased by about 8% between the begining of June when we obtained the first quote to the end of August when we actually placed the order. Hurricane Issac didn't help matters but the housing market is on an upswing and trades/materials are in greater demand. We anticipated framing labor to be $3.50 sq/ft but it's more lke $4.25 sq/f - a 20% increase.

    Bookmark   September 13, 2012 at 11:00AM
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parsonse - thanks for the info. Can you help me understand the cost of total lumber and sq. footage of your home - i ask as I want to understand that even with a 20% increase as per your thread is $6000 a reasonable amount or not.

    Bookmark   September 13, 2012 at 11:08AM
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Beth Parsons

Actually, our framing lumber increased by around 11% - we were anticipating $36k and it came in around $40k instead. That's just lumber and hardware for framing & doesn't include windows, doors, roofing, trim, etc. We have may open spans that require LVL beams ($$) and have a complicated roof line and many, many corners.

Our total sq/ft under roof, including porches & garages, is just over 5,000 sq. ft. which is what our framing bid is based on. Comparing my budget to others on this forum, it's much cheaper to build here in Tennessee, though. We're on track to to have this house finished for under $80/sq.ft using brick, stone, hardi, granite, all hardwood floors, etc.

    Bookmark   September 13, 2012 at 11:31AM
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All of the reasons given above were also the cause of price increases when we built in '06-'07. Additionally, lumber prices can be seasonal, and there was/is (?) the issue of the number of operating plywood factories. When we were building, they were maxed out, and they wouldn't start new ones due to having been burned previously when the economy had tanked and they were stuck with overproduction. I would guess that during the Recession, plywood factories might have downsized due to almost no construction, which might be affecting the supply now.


    Bookmark   September 14, 2012 at 6:51PM
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