Home construction prices in Canada...what the heck is going on?

[Mike476]

...{eh}?

Eh wha.......wha

 

[300UGUY]

Labor is the big killer in building a house, but you do get what you pay for. My competition is charging half of what I charge, and I'm booked up till the end of the year. Two jobs that I looked at this week are jobs that where finished very poorly and with questionable prep work. Both clients want it all ripped out and for me to do it over again. If they accept my bid, I will start sometime after the first of the year.

Be VERY VERY careful hiring the guys who are working for less and who have time to start on the job right away. The slowdown in buildng has led to an increase in remodeling. People are keeping their homes instead of selling and buying new ones. They are putting money into where they live and making them nicer. There is plenty of work out there at top pay for those who have built up a solid reputation.

Eddie

Up here we had 10 years of misery. This state lost almost 1 million manufacturing jobs over from 2000 to 2009. We were the only state to actually lose population from 2000 - 2010. I live in what was the fastest growing county in the state. We lost about 10K in population in this county. And the median income in the county fell 20K!!! When are starting to see a few homes being built, but they are filling in existing subs. And by few, I mean there might be 20 homes or less built in this county this year. If I drive to town, in the 5 miles to the main road, there at least a dozen vacant homes, most of them were pretty nice. One thing holding back construction is that getting a construction loan is almost impossible. Real estate is so depressed, that the banks don't want to finance anything. Wages are way down, but one funny thing is that when you do see construction going on, it's always old guys doing the work. Young guys that had the skills left long ago. A couple electricians I know are in Fla & Texas. A former carpenter is in Colorado. The local school systems are shutting down schools, the young families have left the state.

 

[dfkrug]

I am seeing ICF homes more and more often in my area actually.
I hadn't considered them as an option, never having researched them I thought they would
be cost prohibitive.

Calculating costs is not simple. Not just labor and material costs need to be tallied, but the
collateral costs (or savings) need to be as well.

For example, I built my ICF house without A/C, a huge savings, only cuz the house stays
much cooler than stick-built. Can't do that in Phoenix, but it sure pays here.

I used CSST (corrugated SS tubing) for my propane lines....an expensive product, but
much less labor cost vs. black steel piping. A net savings.

A similar point was made earlier with modular houses vs. custom. The modular house
factory uses labor more efficiently than on-site construction workers.

 

[Qapla]

It's funny ...

For some, $25-$40 hour for carpenters, electricians. plumbers, etc in the building trades is too high and out of control. However, some of those same people don't think twice when a doctor, lawyer, dentist, etc make double that. They also don't seem to mind that people who assemble cars or fry corn flakes to make cereal are paid those kind of wages?

 

[Mike476]

Calculating costs is not simple. Not just labor and material costs need to be tallied, but the
collateral costs (or savings) need to be as well.

For example, I built my ICF house without A/C, a huge savings, only cuz the house stays
much cooler than stick-built. Can't do that in Phoenix, but it sure pays here.

I used CSST (corrugated SS tubing) for my propane lines....an expensive product, but
much less labor cost vs. black steel piping. A net savings.

A similar point was made earlier with modular houses vs. custom. The modular house
factory uses labor more efficiently than on-site construction workers.

Your point reference the many things to consider when costing out a build is valid, and depite a year of what we thought was a comprehensive assessment, there were still ways we could have saved more when we decided to sub out to contractors ourselves. Live and learn.

As far as our final home build is concerned, I will be looking hard at ICF. Now that there are a few homes in our area the county inspectors should be more familiar with coding, I suspect the first few were a learning curve for all involved.

 

[EddieWalker]

No kidding Clem...hmmm, let me think a min. This $600K 2,000 sq ft house..I wonder how much is labor and how much is materials. Just a WAG, but say $200K in material? So, I figure a good crew of 4 guys should be able to build the whole house in 6 months....or about 120 8hr days...right? 960 hrs total means these guys are making $100 an hr. Most likely one is making over $200 an hr, while the other three are getting a lot less.......not a bad living ...{eh}?

The flaw to your math is in the number of guys who are building this house. While in theory it would be possible, and I've honestly thought about doing just that, the reality is that it will take a couple dozen guys to build it. You are also assuming that the $400K is all going towards labor or profit. In my experience, when homes get into that price range, the fees and permits become rather significant. I would say ten percent is going to be fees and permits, but have heard stories of it being a lot more.

Most General Contractors who are building spec homes are paying wages and trying to make 15 percent on the job. Around here, there are several houses in that price range, but quite a few more square that have been on the market for seveal years. The GC isn't making anything until is sells, but all the workers who built it have been paid. The longer it takes to sell, the less money the GC makes because of interest payments on the money to build it and to pay the sub contractors.

Building a custom home for a client means quicker pay, but usually a much smaller percentage of the job. Usualy ten percent, but that varies from place to place and job to job.

 

[clemsonfor]

It's funny ...

For some, $25-$40 hour for carpenters, electricians. plumbers, etc in the building trades is too high and out of control. However, some of those same people don't think twice when a doctor, lawyer, dentist, etc make double that. They also don't seem to mind that people who assemble cars or fry corn flakes to make cereal are paid those kind of wages?

Heres the deal. A doctor went to college for a minimum of 4 years undergrad. Today that costs close to $20k/yr everything included. You have to be at the top of a class to be accepted to med school, thats i think 3 years, maybe 4 i cant remember. Which again is big bucks, then find a residency for 3 more years or so then another if they specialize, say eye surgery or something. Then they have bills sometimes upward of $.5million to repay.

Oh and there is the thing about your life or welfare is in thier care. If the carpenter screws up your out money and a good job, unless a total hack he could cause a house to collapse?

Take me for example, when i was 14 i was working for a trim carpenter/cabinet maker/custom stair builder. I worked there through the first few years of highschool. then went on to the retail type stores. I was interested in carpentry and building, but more to know how to do it for my self and projects. Once in it and when i was doing it i realized i never wnated to be a builder/carpenter. BUT had i wanted to and went straight into it after high school by the time my current self graduated college with all my degrees 6 years, my carpenter self would have had 6 years full time. In that time i think since i am a quick learner that i would have been a decent carpenter, no expert but could definitly handle many jobs on my own. And if in an area where a "decent carpenter" could make $40+/hr say after these 6+ years i was working instead of in college. Point here is i wont ever make $60/hr in my current line of work, and i have 2 college degrees. I also know a college degree is not an automatic ticket to making that kind of money but something is seriously wrong when a "above average" carpenter makes more than a person like me with 2 degrees, graduated #2 in my major and runs a multi million dollar program?

 

[tnmike]

A better question that comes to mind is how do the people there afford a $600,000 house? If you put $250,000 down your payment would be almost $2000/month.

 

[ericher69]

A better question that comes to mind is how do the people there afford a $600,000 house? If you put $250,000 down your payment would be almost $2000/month.

They can't! The bank has no problems lending them the money; don't really care if they can pay it back or not...sound familiar?

Also many of my close friends live WAY beyond their means; big house , new vehicles, cottage, trips etc etc...sound familiar?

Most people I know don't care if they ever pay anything off that the bank owns; they want it and want it now!

 

[clemsonfor]

OK even if your payment is $2000 a month it dont matter if your a CARPENTER making $60/hr!! Before i refinanced i was paying $850 month and i was only making upper 40k a year and the wife 20k a year. We did it no problem!

$40/hr working a full 8 hr day 5 days a week is $83K a year (assuming no down time ever or no overtime) if there making $60/hr thats $120+k/yr, dont matter if your wife works or not on a salery like that!!

Wadges like that you can easily afford $2k/month in payments