With today's housing shortages in Southwest Colorado, many homeowners are turning to building their houses-to-be. But COVID-induced shortages are affecting building supplies -- and the cost of building your own home.
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Hey everyone,
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Dan Koreman here.
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Welcome to the Real Estate Update,
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brought to you by
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Alpenglow Properties,
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shining light on your
greatest investments.
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Thank you to the Local NEWS Network
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for keeping the content pumping
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over the last year.
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I'm so happy to be able
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to continue providing
valuable info to you.
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And it wouldn't be possible
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without Local NEWS Network.
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It's March 1st, 2021
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and spring is in the air.
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My wife's about to have our second child,
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and housing inventory
is at an all time low.
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Let's dig into it!
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Its safe to assume you all know
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what's going on out there.
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Pent up demand in awesome places to live,
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like Durango,
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has persisted through the pandemic.
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Many folks have turned
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to building their own home,
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and that is what we're going to
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be talking about today:
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home building.
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Sounds fairly straightforward, right?
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You buy a piece of land,
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you hire a general contractor,
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design a fantastically modern
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energy efficient home on your iPad
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and bam, you've got a home in 6 months.
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Well, not so fast.
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Builders have faced many headwinds
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over the last year.
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Creating increases in budgets
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due to lack of labor and materials.
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One such shortage
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was in the lumber industry.
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Industry experts say several events
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lead to a lumber shortage last year,
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including Covid-19 lockdown
orders and closures,
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directly affecting the supply chain,
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new safety protocols that
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slowed production at mills,
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and a spike in home remodeling
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while Americans were quarantined at home.
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This was all followed by
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a massive wildfire season,
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not just locally,
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but all over the world,
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directly affecting the supply as well.
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Millions of board feet of timber
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were wiped out in the
Oregon wildfires alone,
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and the southwest has been
hit hard in our supply.
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National Association of
Home Builders reports
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that between-mid April
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and mid-September last year,
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lumber prices soared more than 170%,
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adding over 16k to the price
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of a typical single family home build.
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While prices drifted
lower at the star of fall,
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they seem to be on the rise again.
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A good example of that is
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right here at our local Home Depo,
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where you can get a 4x8
sheet of OSB for $37,
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where that same sheet of
OSB last year was 8 bucks.
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At one point last year,
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I know builders that couldn't even
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get a GFCI Receptacle due to shortages.
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And while many manufactures
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are indeed getting production back online,
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it will be some time
before we see supply chains
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back to normal.
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Even then, we're not sure
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how the pricing will be affected,
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especially out here in Southwest Colorado.
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So something else to think about,
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if you're going to build a home,
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is where are you going to put that home?
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Pre-pandemic La Plata County
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had a plethora of land available for sale.
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Still kind of does.
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From March 1st, 2020 to March 1st, 2021,
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there were 408 residential
vacant land partials
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sold in La Plata.
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Sound low?
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Well, that's 2X last year,
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and 2X the year before that.
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So that shows that there already is,
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and will continue to be,
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a building boom in our area.
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There are 149 active residential lots
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available in La Plata County today.
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So we'll keep you updated
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on the rate of absorption,
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as we move into Q2 next month.
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We are watching the building
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and real estate industries closely,
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with hopes of pressure relief
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for both consumers and builders alike.
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No one wants their budget blown out by 30%
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because they didn't expect
a shortfall on materials.
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So its important to vet your builder
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early in the process
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to ensure their confident
in their numbers.
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If you ever want recommendations
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on our preferred vendors,
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we're always happy to suggest
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some of our favorites in town.
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Until then, we hope you
have a wonderful spring!
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It's time to start getting back outside,
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and I, for one, am very happy
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to do some exploring in our backyard.
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Thank you for watching this months episode
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of Durango Real Estate Update.
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If you'd like to follow
us on social media,
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you can find us on Facebook,
Instagram, and Twitter
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on the handle '@DurangoBrokers'.
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Or, feel free to email me any time at
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'Dan@AlpenglowProperties.com'.
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Have a beautiful March,
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stay strong, and be kind to each other.
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Thank you.
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