Sunday, October 25, 2020

It's No Surprise to Anyone that Construction Costs Keep Rising

Both new commercial and residential construction projects are victims of rising costs, a shortage of skilled labor and regulations and things could always get worse.

These days, most of your favorite mid-market purchases come cheap: laptops, televisions, cars, housecleaning, home exercise and sanity are all at bargain-basement prices, after inflation, compared to decades past. (Thanks, Roomba, and generic Prozac!) But not home construction and remodeling. The same home construction project with an eyebrow-raising price tag a decade ago now costs the blood of your first born.

According to the National Association of Home Builders, the average single-family home cost $222,511 to build in 2009 ($82 per square foot), and $296,652 in 2019 ($114 per square foot), which is a 15% hike after inflation. If you want to own your home, you can’t avoid these numbers by simply buying an old home: New construction prices tend to boost the price tags of nearby older homes.

“In all my years in the business, I’ve never seen prices go down,” says Gregg Cantor, president and CEO of San Diego build and remodel company Murray Lampert, who has been a contractor for 37 years.

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