Whether you’re just considering the idea, deep in the planning process, or already paying the bills, you know new construction is no small financial undertaking. But in uncertain economic times surrounded by inflation, you might wonder: Has it always been this expensive? And, will it return to “normal”?
Although we wish we could bring prices back down to pre-pandemic levels, unfortunately, the answer to both questions is no. Here at NCC Builders, we’re here to keep you supported and informed through every part of the process, so we put together the following research to help you understand the complexity of why prices are so high and why they might stay that way.
Escalating Material Costs:
Since the COVID-19 pandemic, specialty items like siding, millwork/trim, windows, and flooring have significantly increased prices due to various factors, including supply chain disruptions, rising demand for materials due to increased construction activity, and inflation. Builders must allocate a larger portion of their budgets to cover these materials, which, in turn, drives up the overall cost of projects.
Ripples from labor market disruptions in 2020 and 2021 are still being felt today, and the construction industry has a shortage of skilled labor. This shortage impacts the cost and can lead to delays in project timelines, potentially increasing expenses further.
Land and Location Costs:
The cost of land is a critical component in any construction project. In many areas, prime real estate has become increasingly expensive, which adds a significant financial burden to developers or home owner. As desirable land becomes more scarce, costs are expected to continue rising.
Environmental Sustainability and Energy Efficiency:
In an era of heightened environmental awareness, builders are often required to incorporate sustainable practices and energy-efficient technologies into their projects. While these initiatives reduce the carbon footprint of new buildings, they can involve additional expenses, such as installing solar panels, advanced insulation, or environmentally friendly materials.
At NCC Builders, we’ve been constructing high-quality custom homes and commercial projects on time and on budget since 1972. Let’s start the conversation about your new home or business today!