Why the Cost to Build a House in Columbus Ohio is Increasing

Hey it's Marc Van Steyn with the Van Steyn Partners at REMAX Premier Choice.

What is causing the price of new construction to rise so quickly? 

If you've been following the real estate market the last 12 months you've probably noticed the cost to build a new home is through the roof, pun intended.  What are the factors causing home prices to rise so quickly ?  Well there are a couple. 

First, the cost of raw materials especially lumber have risen dramatically the last year.  The cost of all raw materials used to build a house have increased including concrete and windows and shingles but the cost of lumber is up almost 40 percent from a year ago.   The cost of lumber alone can add tens of thousands of dollars to a new build much of lumber cost increase can be attributed to demand but in some cases its lack of supply or raw materials and supply chains.   

Secondly the cost of labor or subcontractors build the homes.   Everyone I know in the trades tells me it's impossible to find good people to work let alone good craftsmen.   Those that are working or have good crews are charging top dollar because demand is so high and they are typically booking out weeks in advance.

 Number three which is often overlooked is a regulatory cost according to the national association of home builders.  A huge portion of the cost to build a new home can be attributed to the regulatory costs these include permitting inspections and costs associated with land development.  Much of this red tape cost can differ greatly from municipality to municipality so make sure you do some homework on where you want to live before you build.

Lastly if you're considering building make sure you read and understand the builder's fine print in the purchase contract it's been reported in cases around the country that some builders have increased the cost of a new build midway through construction there have also even been reports of builders canceling contracts outright because of increasing cost.  Luckily I haven't heard of any of these instances happening here in Columbus but you always want to make sure you completely understand what you are assigning especially with a purchase as large as a home.

If you have any questions about new homes or the buying process give me a call 614-596-2934