Escalating Construction Costs

[RSKY]

Family was here today eating lunch after church. Once the hooligans finished and left the table to destroy the house. Well, the grandkids went out to sunroom to play, argue, and fight. Just a normal Sunday. And really, they are good, polite, considerate kids who just like to talk loud argue and pick on each other.

Hmmm, better get on subject.

One of the people at the table brought up a local county who was planning on building a new central high school. The pre-COVID shutdown price (I believe it was early 2020) was around $115 million. But the project had to be halted before ground was broke because of the shutdown. It was recently rebid and the lowest bid was $205 million.

That goes along with the gas pack central unit oldest has ordered that will cost $6500. Same unit for us in 2019 was about $4500.

This is scary!!

RSKY

 

[ultrarunner]

Dollar does not go as far and more I know are cutting back…

That said I had scheduled some deck replacements for this Spring and contractor said just too busy and now he says his schedule is opening… maybe a slowdown?

 

[WVH1977]

Around here, a trailer on an acre is $ 200,000. My neighbor down the drive has an old construction trailer he converted into a house to live in on his land. It is by far nothing fancy and I would not live in it. He said he got it for 1000 bucks I think. No power to it or well. The county has it assessed at $ 80,000. Insane!!

 

[ultrarunner]

Yep... 40% property tax increase from assessor for pandemic 2 years...

 

[Torvy]

Construction costs for public buildings are almost always higher than private sector builds.

 

[2manyrocks]

Dog food, milk, soft drinks, cars, everything. A quart of oil used to be .69 cents. Even the cheapest oil is over $5.00/qt.

MMT + lack of any fiscal discipline.

 

[EddieWalker]

Commercial construction pricing is just as much about dealing with those in charge as it is with the price of materials. Probably more so. I did a few projects and their requirements meant that I had to use things like fire proof interior doors instead of just a solid wood door for about three times the cost. Same with door knobs and light fixtures. Then dealing with every level of personal for the job took a bunch of time. Worse was probably in getting paid. So many people involved before I get paid. First time I did it, I doubled what I would charge for a similar residential job, and I lost money. Second time I quadrupled it and did OK compared to what I would have made doing a residential job, but the delays in getting paid made it so frustrating that I don't do commercial jobs anymore.

Lumber is still twice what it was two years ago, but that's better then what it was six months ago. I'm building an attached garage onto my house and it's painful paying these prices for what I need. Instead of putting it off, I'm just moving along a lot slower then I would prefer so I can pay cash for everything. If I don't do it now, I don't know if I will be able to afford it in the future.

I'm booked up for at least a year right now and I'm telling clients that I cannot give them a start time with any accuracy. They are still accepting my bids because they want it done and have said that if the wait any longer, they probably wont be able to afford it. For the last year, every job that I've done has added to it for the same reason. Do it now while they have the money because they are worried they wont have it in the future. I've also had several clients put off retiring for the same reason.

 

[ultrarunner]

Yep... all of a sudden co workers are delaying retirement with many saying they will work a little longer to pay for thing around the house.

 

[Oaktree]

Construction costs for public buildings are almost always higher than private sector builds.

Partly because many cities/towns/states as well as the feds require union workers be used. That drives up the costs significantly. Generally a lot more red tape involved with these projects too.

A quart of oil used to be .69 cents. Even the cheapest oil is over $5.00/qt.

Where have you gotten a quart of oil for 69¢ in the last 45 years?

 

[kevin37b]

Engineers not union workers .