Sign up to get new listings emailed daily! JOIN SIGN IN
Terry Lipe
REALTOR®, CRS, ABR, CLHMS, SFR, CNHS, RCC
(509) 999-7916
Facebook Icon Realtor.com Icon Zillow Icon VCard Icon 

Date Archives: March 2021

Terry's Real Estate Blog Home

Subscribe and receive email notifications of new blog posts.




rss logo RSS Feed
Buying A Home | 5 Posts
Doers of Good | 1 Posts
Food | 5 Posts
Holidays | 4 Posts
Market Reports | 54 Posts
Moving Tips | 1 Posts
News | 3 Posts
Selling A Home | 5 Posts
Spokane Life | 34 Posts
Spring Cleaning | 1 Posts
Technology | 1 Posts
Uncategorized | 1 Posts
March
25

Crazy Prices: What's Really Driving Up the Cost of New Homes

From the March 2021 issue of @Home with Coldwell Banker Tomlinson.  Written by Chris Canning, Coldwell Banker Tomlinson Realtor®

As both a licensed REALTOR® and home builder, I often scroll through my Facebook feed and see homes advertised by our area homebuilders and fellow real estate agents. I often see such remarks as: "They want how much for that house? They're crazy!" or "Why can't builders build more affordable homes?" The general public is not aware of the obstacles faced by members of the industry tasked with meeting the demand for housing. Chief among these obstacles are: 1. A lack of affordable land. 2. Dramatic increases in the cost of materials. 3. The scarcity of qualified tradespeople.

  1. Land

    The first line item on any builder's ledger is lot cost. At present, Spokane is faced with issues in obtaining, developing, and delivering reasonably priced lots to builders. Briefly stated, Spokane's Comprehensive Plan dictates when, where, and how development and construction can take place. Its purpose is to prioritize use of existing infrastructure and improvements before venturing into areas that would require expanding infrastructure. Unfortunately, the land within the boundaries of our "Comp Plan" that was easiest and most cost-effective to develop is gone, leaving only very complicated, expensive, steep, rocky, pieces of property to develop. Consequently, developers and builders are forced to confront more expensive and complicated properties and projects. Many consumers who are able are paying these increases, while others have simply been forced out of the market. Let's assume a builder can build a home for $200.00/sq/ft and obtain a fair profit. If the builder is able to obtain a building lot for $60,000, and builds a 1,500 sq/ft rancher – he would need to charge $360,000 for this home. If, due to scarcity, the cost of the lot rises to $80,000, the result is an increase in the finished cost of the home of about $22,000. Otherwise, the builder sees his/her margin of profit slip, which would make it more difficult to obtain financing. Ultimately, the consumer bears the brunt of the cost increase, while the only party to benefit is the original landowner.
     
  2. Materials

    You may have heard in the news recently that lumber prices have nearly doubled in our area and elsewhere across the nation. However, it's not just lumber that has seen extensive price increases due to scarcity. Across the board (no pun intended), shortages in roofing, wiring, flooring and other materials, have significantly increased the cost of building a new home today.
     
  3. Skilled Labor

    Ask any home builder in town why homes are costing more, and be prepared for a lecture on the shortage of labor in the building trades. As a millennial, I was pushed hard to pursue a career requiring a college degree. I wish I had known then how much demand Spokane would have for skilled labor in the building trades in 2021! Talking to the many friends and family I have working as skilled tradespeople, I find that every one of them is inundated with work, to the extent that they can choose whom they work for and what they should be paid. As a result, while today's new homes are not framed any straighter or plumbed more reliably than those built five years ago, they are a lot more expensive to build, and, thus, to buy.

Lurking behind every one of these factors in the increasing cost of new homes is the Demon of Demand. As long as Spokane remains the wonderful place to live it is and always has been, we can expect to see increases in the cost of housing, though perhaps less steep than we are coping with now, extending into the future.

March
4

Coeur d'Alene Real Estate Market Report - February 2021

View our comprehensive Coeur d'Alene real estate market report for the month of February!

The information in this report is compiled from a report given by the Spokane Association of REALTORS© and to the best of our knowledge is accurate and correct.

 

Download the February Market Report PDF here.

Want more info about the current real estate market? Contact us today to speak to an agent. 

 

March
4

Spokane Real Estate Market Report - February 2021

View our comprehensive Spokane real estate market report for the month of February!

The information in this report is compiled from a report given by the Spokane Association of REALTORS© and to the best of our knowledge is accurate and correct.

 

Download the February Market Report PDF here.

Want more info about the current real estate market? Contact us today to speak to an agent. 

 

Disclaimer: All information deemed reliable but not guaranteed. All properties are subject to prior sale, change or withdrawal. Neither listing broker(s) or information provider(s) shall be responsible for any typographical errors, misinformation, misprints and shall be held totally harmless. Listing(s) information is provided for consumers personal, non-commercial use and may not be used for any purpose other than to identify prospective properties consumers may be interested in purchasing. Information on this site was last updated 01/29/2023. The listing information on this page last changed on 01/29/2023. The data relating to real estate for sale on this website comes in part from the Internet Data Exchange program of Coeur dAlene MLS (last updated Sun 01/29/2023 10:16:22 AM EST) or Spokane MLS (last updated Sun 01/29/2023 12:00:45 PM EST). Real estate listings held by brokerage firms other than Coldwell Banker Tomlinson may be marked with the Internet Data Exchange logo and detailed information about those properties will include the name of the listing broker(s) when required by the MLS. All rights reserved. --



Privacy Policy / DMCA Notice / ADA Accessibility

Login to My Homefinder

Login to My Homefinder