Construction Pricing Trends - Grinch, Scrooge or .......

Prices for products such as lumber and drywall rose almost by the day during the construction boom. After the economy crashed and construction demand fell to a drip, prices routinely dropped in line with weakening demand. Construction surely hasn’t recovered and might be just above bottom but, contractors are seeing the cost of building products heading up again.

Prices for building materials have just as much to do with local demand as they do with the speed of development in fast-moving economies such as Brazil, China and India. Overall, construction prices dipped in November by 0.1 percent but are up 6.2 percent over last year, according to a report by Associated Builders and Contractors, citing government data.

However, concrete and electrical wiring components are some of the products suppliers have said could rise 5 percent to 10 percent in 2012. Monthly steel prices have declined, though steel is still up 11.2 percent over November 2010, Petroleum, which affects the price of transporting commodities, is up 19.3 percent over a year ago.

The cost of labor is also is a wild card. There’s less competition, because contractors and sub-contractors who had bid for work at unsustainably low prices are now out of business. The remaining companies can charge higher rates. The costs of health care and other types of insurance also are rising.

The Construction Boom saw double-digit price inflation for supplies and labor. That balloon was deflated in the recession. The question is, where are we going from here?

Whole House Made In USA

Was just sent the most amazing News story done by ABC. ABC found a Home Builder in Montana who built a house 100% of products made in the USA. An Economist confirmed increasing the content of American made products in all houses just 5%, at the current low level even, would create 230,000 jobs.

This link AMERICAN MADE will take you to the story and a down loadable PDF File of Materials and Suppliers. I think the challenge has been made and I for one except it. This would give a Green Home a whole new context. Commercial LEED could be Let's Expand Employment Demand.

Use A Commercial Developer's Skills & Knowledge On Your Project

Most people think of Development and Developers as working with commercial companies on creating facilities for those companies to lease. The Company, Big Box Retail, wants a new store in Anytown USA. Big Box Retail contacts Developers informing them of their desire for the store and how the store should look, how large and what features are required. Developers submit Proposals to Big Box. Big Box selects a Developer/Proposal. Contracts are executed and the Developer uses the Contract to obtain financing, purchases land approved by Big Box, does design and engineering to Big Box specifications, pulls permits and constructs facilty. On completition Big Box moves in and starts paying Developer lease payments. Depending on Contractural restrictions Developer may or may not use the Site to add other large Retailers, Strips of small shops or out parcels for C-Stores, Fast Food and even Drug Stores.

That is only one way a Developer could work. A Developer could locate usable property, obtain financing, purchase land, do design and engineering done to his specifications and budget, pull permits and construct a facilty. During Construction and at completition the Developer markets his project to businesses for lease. Flex Space, commercial space designed for many uses not just one or a few, is typically an example of this process.

A Development Model we utilize is managing your Construction Program. Because we are Real Estate Brokers and licensed as Building, Highway and Water/Sewer Utility Line Contractors we can work with companies and individuals to help them purchase land, do design and engineering, pull permits and construct a facilty for their occupancy and use without involving us in the financing, leasing or ownership of the Project. We develop your construction, remodel or expansion program so that your focus is on doing what you do best, making money with your business and not on a complex, highly regulated Construction Program and Project. Managing your Construction Program is what we do best.

Contact us to explore if we can develop a Construction Program for you.