Buying a Fixer-Upper? Some Raw Materials Hard to Find
Buyers planning to fix up an existing home face the same challenges new-home builders do: Expensive or hard-to-find items, such as appliances or lumber.
CHICAGO – Supply chain woes have hitting the housing market, affecting appliances, windows, paint and other items needed to build, repair or improve home. Some of the supplies are not only hard to find, they’re also more expensive.
New-home buyers have felt the pinch: The median sales price for a new home in October was $407,700, up 17.5% compared to the same time a year ago, according to realtor.com data. Builders point to higher material costs, as well as labor and lot shortages.
The blame for the bottlenecks has been placed on a variety of causes: the ongoing pandemic, Americans buying more for their homes, a shortage of shipping containers, added tariffs on goods and other issues. A lack of workers at ports and drivers is also slowing logistics, analysts say.
“Consumers should expect continued frustration with delays and rising prices,” Ali Wolf, chief economist at Zonda, a building consulting firm, says.
Supply frustrations for fixer-upper buyers
Lumber prices remain high, with softwood jumping 70% since the pandemic began. That’s down from summer peaks but still well above pre-pandemic levels.
“Those declines in lumber prices have had a positive effect, but they have not come down all the way,” says Robert Dietz, chief economist at the National Association of Home Builders. Plus the “pricing of just about everything else has gone up.”
Household appliance backlogs are also pressing on the housing market. Unfilled orders have nearly doubled since the pandemic began. “Whether it’s a remodeling project or a new build, delays in the supply chain are having an impact here in the housing market,” Dietz says.
Costs for paint also increased, jumping 15% compared to 2019. Paint suppliers struggle to keep up with the high demand from new-home construction and homeowners’ remodeling projects, analysts say.
Furniture costs are up as well – prices on home furnishings rose 5% since 2019, realtor.com notes. Furniture retailers report that many consumers wait months rather than weeks for their furnishings to be delivered.
Source: “Everything and the Kitchen Sink: How the Supply Chain Is Strangling Real Estate—and What You Need to Know,” realtor.com® (Nov. 30, 2021)
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