Developers Are Struggling to Keep Up With Housing Demand
Don’t take it personally if you end up on a waiting list for the home you want. Developers are struggling to keep up with demand.
“Projects already sold can’t be built,” says Jon Mast, CEO of the Manatee-Sarasota Building Industry Association.
Everything from appliances to windows to the metal plates that hold together the wood trusses in roofs cost more. For instance, lumber prices have increased more than 300 percent since April of last year, causing the average price of a new single-family home to increase by nearly $36,000, according to the National Association of Home Builders.
The local story is similar. Joe Fontana, president of M/I Homes in Sarasota and Southwest Florida, says material costs have recently added up to $20,000 more to some home prices in just one month.
And it’s not only taking more money to build, it’s taking more time.
“A normal timeline from sale to move-in would be an average of six months, but now it’s more like 10 months,” says Fontana. “We can sell everything we have if we wanted to before building, but we don't know when we can deliver, and that wouldn't be fair to the buyer.”
The added time it takes to build and deliver a home to buyers also gives developers pause, since they don't know what the prices will be in the months to come, Fontana adds.
On top of climbing material costs, Mast says a combination of what industry people are calling the “Great Southern Migration” to Florida plus a labor shortage are disrupting production and delivery.
As a result, many developers are rationing the number of homes they can list for sale.
“We looked at Waterside, Esplanade and Artistry and the message was similar,” says real estate adviser Andrew Tanner, of the Peter G. Laughlin Group with Premier Sotheby's International Realty. “The process now is that buyers can make a deposit on the home, and when it’s ready to be released, they're one of three people who have to compete for it.”
Some home shoppers are widening their search, settling for areas outside of locations they had originally preferred, while others lucky enough to land a home find loopholes. For example, to claim a certificate of occupancy from the builder, a stove must be installed, so buyers are getting broken, second-hand stoves to close the sale with the understanding that it will be replaced.
To remedy soaring costs, Mast says he and other industry leaders are urging the Biden Administration to regulate prices, likening the situation to a national emergency. “It’s similar to regulating price gouging essentials when there’s a hurricane. The lumber industry is price gouging the country at a time when we can least afford it,” he says.