You found the perfect neighborhood.
Bought the land.
Hired the architect.
Found a builder
Received permission from the city to build according to your plan.
NOW. YIKES. The sticker shock has set in.
For those looking to move, you have options. You can purchase an existing home or buy in a new home community.
A third option is to have someone build a custom home.
The upside to a custom build is that the home buyer has so much decision making power in what the home will look like. The downside is that those who choose to build this way are in for some sticker shock.
Why is this?
1) Current trade wars have hit the materials market. Custom builders, who often pay a higher price than national builders, are finding that their costs have been rising more rapidly these days. Large-scale builders are feeling the price pressure also, but not to the extent that the small builder does. Custom builders tend not to have the volume to demand the same kind of buying leverage.
2) If construction is steady in your area, chances are the builders have to pay a higher wage in order to keep their crew. Where I live, for instance, there is a massive construction project at the airport. One builder friend told me that their workers are being approached on-site with this proposition, "how much are you making? we can beat it."
No matter how loyal your trade workers are, they'll entertain the possibility of making more money.
Finally- is this a momentary problem? I hear mixed opinions on this. It's anyone's guess.
I'm of the mindset that (at least in my area) we'll be in this position for the next year. If there is a market downturn, if the trade barriers are erased, if more construction workers magically show up, then pricing will trend downward and custom builders will be able to compete on price with the other alternatives
That's quite a few ifs though.
What's your hot take? Let our readers know in the comments section.