Building a House

[86Aviator]

This is probably more of a rant, good people of POA. After spending 2020 working largely from home in a two bedroom midtown Atlanta apartment, my wife and I decided in January to build a house out in the 'burbs. We plan to grow our family, interest rates are low, the subdivision and floorplan tick a lot of our boxes and would theoretically meet our needs for the next 20 years, the apartment got super small when we stopped regularly traveling for work - bottom line, it is finally time for these (relatively) newlywed 30-somethings to become homeowners.

As excited as we are, the progress is just. so. slow. There are something like 70 houses ahead of us in the queue (which we knew going in) and the local municipality takes almost 3 months to issue a building permit (which we also knew going in), but my goodness I thought we would have had a design appointment by now (one of two we're supposed to do). Nada. We contracted in mid-January and the only progress so far has been that my check for the 15% deposit cleared the bank.

I don't think our experience is unique in the region. One of my colleagues is rebuilding his lake house (near the GA/NC line) after it burned in late 2019, and his construction progress has also been slow and frustrating. Suppliers are/were having trouble with certain things (windows and appliances, I've heard) and general labor can be somewhat...unpredictable. We're just along for the ride that we signed up for.

We knew the timeline going in, the experience is not unique to us, this is what we signed up for...we're just so ready to get out of midtown Atlanta and into our new home.

Like I said, just a rant. If anyone else is building, I hope your timelines are more palatable.

 

[midwestpa24]

We were supposed to be breaking ground this spring, but pushed our project until next year until supplies and contractors may get closer to normal.

 

[Ted]

I feel your pain.

We started the process almost a year ago to build the shop on our property. The shop is physically up and we’ll be moving stuff in in a few weeks, but it’ll still probably be a few months before it’s all done fully, maybe more.

The permit took months, then there was the concrete for the foundation (that took a while...), then the building up, then electrical...

 

[steingar]

I was in Atlanta. I recall seeing lots of extant houses for sale. Just spitballing here.

 

[Seanaldinho]

The housing boom right now is really crazy, the price of lumber alone is driving up housing costs. I've put off redoing our fence because it would be almost double the cost for materials.

Sadly, I don't think your experience is unique. Housing costs in my area are up almost 25-30% in the past two years.

 

[SoonerAviator]

In my area, housing normally costs around $110-120/sq ft for most homes that aren't high-end custom jobs. Right now, running rate is $165-170/sq ft. The material prices have gone insane, mostly in concrete and lumber, but really everything construction-related has had demand increase so much over the past year that it's making home building look less attractive. Adding 20%+ in material costs to the same house is going to hurt a bit when the housing market stabilizes, but that's just how the cookie crumbles sometimes.

 

[mondtster]

We were supposed to be breaking ground this spring, but pushed our project until next year until supplies and contractors may get closer to normal.

Probably a good plan. I looked at building my parents a new house recently and the costs are astronomical right now. Of course, it doesn't help that they're living in a highly desirable location that was already inflated due to limited supply and high demand. We're hoping that things will settle in a couple of years and we'll be able to build something similar to what was possible before things got out of control.

Right now, the cost to build something with a similar square footage to what my parents currently have would cost at least three times what they have into their current property. That doesn't even include buying the land or getting services to it.

 

[CJones]

Saw an article in Forbes or WSJ last week or so that showed increase in lumber prices over the past 12 months. Insane!

We got a new bed a few weeks ago. It uses slats instead of box spring, so I headed down the local big box store to get some basic 1x4's to throw onto our existing frame. I ended up paying almost $7/ea for 1x4x8'. Ridiculous! I had hoped to completely remodel our master bath and redo our privacy fence soon, but like someone else said - I think I'll wait until these 'simple' projects don't end up costing an arm, leg, and two gold teeth!

 

[86Aviator]

Yea, the area is one of the better school distracts in the metro, so the RE market there is honestly pretty aggressive. We decided to build instead of buy existing when we literally could not even see a new listing before it suspended showings with multiple offers. The final straw was when a house popped up on Realtor.com around 10 pm one night that looked to be 75% of our "must have" list; we emailed our realtor right away, who called at 8 am the next morning (i) saying the home was not accepting any other showings as it had received something-teen offers already (no kidding), and (ii) asking would we like to submit an offer to the pile? Umm, no, I don't think we do, thanks, Ms. Realtor. And this was in early January, not the traditional "selling season."

Prices and shortages of materials have plagued this builder's schedule. It's a large local builder (not national, AFIK), so maybe they do a bit better than the smaller companies, but it has still been pretty bad it seems. Oh, and the base prices of the floor plans keep creeping up - $10k across the board two days after we went under contract, ostensibly due to the cost of said materials.

Those talking about lumber prices will probably not be surprised to hear: when we asked about the cost of adding stairs off of the deck (deck is on the back of the main level of the home, built on a basement lot), we were quoted $14,000 "as of current material prices". I couldn't believe it. The stairs can wait a few years until the lumber market stabilizes a bit...Mrs. 86 wants a fancy (to us) kitchen, so I'm sure we'll have plenty of opportunities to spend that money elsewhere.

 

[Ted]

Saw an article in Forbes or WSJ last week or so that showed increase in lumber prices over the past 12 months. Insane!

We got a new bed a few weeks ago. It uses slats instead of box spring, so I headed down the local big box store to get some basic 1x4's to throw onto our existing frame. I ended up paying almost $7/ea for 1x4x8'. Ridiculous! I had hoped to completely remodel our master bath and redo our privacy fence soon, but like someone else said - I think I'll wait until these 'simple' projects don't end up costing an arm, leg, and two gold teeth!

Where that benefitted us was that our steel building ended up being a pretty decent cost, largely because a pole-barn style would've had lumber costs go up so much. Of course the wood mezzanine and the big wood deck we built still are made out of - you guessed it - wood.

It's been basically a year of construction on our property in some way or another. But I still spend most of my personal efforts on wrenching...

 

[GRG55]

...Prices and shortages of materials have plagued this builder's schedule. It's a large local builder (not national, AFIK), so maybe they do a bit better than the smaller companies, but it has still been pretty bad it seems. Oh, and the base prices of the floor plans keep creeping up - $10k across the board two days after we went under contract, ostensibly due to the cost of said materials...

Record setting historically low interest/mortgage rates and a whole lotta people in the same situation as you (working from home on the kitchen counter in the apartment seems unappealing after a year) moving to the 'burbs is powering this.

Compounded by what you and others have noted - inflating material costs, inventory and supply chain issues, shortages of skilled labor and then there's the issue of the homebuilders having to cope with keeping workers safe in a COVID environment which doesn't do anything to speed up the pace of construction either.

Now that prices and mortgage interest rates are rising it might cool things off in the months ahead. Maybe.

 

[idahoflier]

@86Aviator - Rant away, it helps! Congrats on starting this next adventure with your young family. Blue Skies!

 

[flyingcheesehead]

Demand is through the roof because everyone is in the same situation you are, trying to get out of apartments in the new work-from-home world... And, of course, supply chains are still somewhat abnormal due to Covid so material costs are through the roof as well. It's kind of the perfect storm for houses being expensive. The entire housing market is insane. My house's value is up 40% in 6 years according to Zillow, and they're more conservative even than our bank IME.

 

[Ted]

Record setting historically low interest/mortgage rates and a whole lotta people in the same situation as you (working from home on the kitchen counter in the apartment seems unappealing after a year) moving to the 'burbs is powering this.

Compounded by what you and others have noted - inflating material costs, inventory and supply chain issues, shortages of skilled labor and then there's the issue of the homebuilders having to cope with keeping workers safe in a COVID environment which doesn't do anything to speed up the pace of construction either.

Now that prices and mortgage interest rates are rising it might cool things off in the months ahead. Maybe.

We got our timing pretty good. We saw what was going to happen, refinanced with really low rates towards the beginning of Covid (they haven't really moved since then) and then locked in lower pricing on our steel building when companies were still worried about a drop in sales. Of course that didn't happen, but we got a lot of good prices locked in as a result.

The lumber prices for our wood deck and the shops mezzanine were high, but oh well.

 

[IK04]

In my area, housing normally costs around $110-120/sq ft for most homes that aren't high-end custom jobs. Right now, running rate is $165-170/sq ft. The material prices have gone insane, mostly in concrete and lumber, but really everything construction-related has had demand increase so much over the past year that it's making home building look less attractive. Adding 20%+ in material costs to the same house is going to hurt a bit when the housing market stabilizes, but that's just how the cookie crumbles sometimes.

I drove through the 51/turnpike area a few months ago and was amazed at the growth in that area. Those prices are crazy for "rural" Oklahoma...

I'm glad I was able to build a house for $63/sq. ft. when I could. I really understand why builders like Centex own their lumber and concrete production facilities.

Cost cutting by removing middle men versus cheaping out is a good thing...

 

[SoonerAviator]

I drove through the 51/turnpike area a few months ago and was amazed at the growth in that area. Those prices are crazy for "rural" Oklahoma...

I'm glad I was able to build a house for $63/sq. ft. when I could. I really understand why builders like Centex own their lumber and concrete production facilities.

Cost cutting by removing middle men versus cheaping out is a good thing...

Absolutely. Even 10-12 years ago, you could build a large custom home for $80/sq ft just about anywhere in OK. Hard to believe it now costs twice as much for the same home. We're not currently in the market for home building, but we will likely look at that option in about 8-10 years when the kids are old enough to start getting into junior high/high school. Hopefully there will be some huge shift in market prices and we can afford to build what we want by then lol.

 

[NealRomeoGolf]

The entire housing market is insane.

Unless you live in Illinois.

 

[86Aviator]

Unless you live in Illinois.

I heard that. I was speaking with a colleague in Chicago yesterday who said the market there is ALL outbound. Across the line in Wisconsin sounds like it is as nuts as everyone else, though.

 

[weilke]

I wonder what's going to happen to the market after the covid thing with the drive to move to the burbs and rural areas is over.

 

[flyingcheesehead]

Unless you live in Illinois.

And then, it's just that the entire state is insane.

But yeah, with the state government's ongoing financial crisis on top of everything else, I bet only Silicon Valley is going to beat the exodus from Illinois.

I heard that. I was speaking with a colleague in Chicago yesterday who said the market there is ALL outbound. Across the line in Wisconsin sounds like it is as nuts as everyone else, though.

I heard that Milwaukee has had the biggest gains in population of any city during the pandemic. Hopefully it's not just Chicago moving across the border!

 

[NealRomeoGolf]

And then, it's just that the entire state is insane.

But yeah, with the state government's ongoing financial crisis on top of everything else, I bet only Silicon Valley is going to beat the exodus from Illinois.



I heard that Milwaukee has had the biggest gains in population of any city during the pandemic. Hopefully it's not just Chicago moving across the border!

Well, good news is a friend of ours just sold their house on the north side of Chicago in 5 days. I guess it's not all doom and gloom.

 

[flyingcheesehead]

Well, good news is a friend of ours just sold their house on the north side of Chicago in 5 days. I guess it's not all doom and gloom.

I have two coworkers who just bought houses within the last few months and one who's trying right now. Houses are getting multiple offers within an hour, and selling for 10%+ over asking. 5 days would be an eternity here for a good house.