The coronavirus pandemic in 2020 has created a shift in the way most of us live, work and do business. It seems like every day, we’re having to make adjustments and fundamentally alter the way we go about our daily lives.
One thing that’s been a positive, however, is the area’s real estate markets, with both the number of sales and the overall volume far exceeding this time last year. But inventories are historically low and that needs to improve if we’re to stay on the current upward trajectory.
And then there’s the rising price of lumber that has the potential of slowing down the market. Time will tell if this is the case, but it’s definitely a warning sign related to the cost of new construction at the Delaware and Maryland beaches.
That’s the topic we’re going to cover in today’s blog. But before we get into the nuts and bolts of the area’s lumber and new construction industries, watch the video below from Oldfather Group Founder and CEO Dustin Oldfather as he shares his thoughts on this concerning trend.
As Dustin mentioned, prices for newly constructed homes have gone up 130 percent since the onset of the coronavirus pandemic back in April. That’s an additional $16,000 added to the average new home cost at the Delaware and Maryland beaches.
There are a number of people who feel this is simply home builders taking advantage of the situation, much like gas companies hike the prices of gasoline anytime there’s either a real or perceived threat to the distribution network.
But in this case, there are certainly some facts and tangible evidence that this is a price hike brought about by the current national and international environment.
With so many people spending a far greater amount of time at home these days, there are a lot more “Do It Yourself” projects being done to keep busy. Tasks that homeowners could never find the time to do before are suddenly being taken on to fill additional days spent at home and outside of the office.
These outdoor projects are adding to the national lumber shortage and, predictably, driving up prices across the board. And until we’re past the current pandemic, this trend is likely to continue.
This is especially true when you add the lumber shortage to an already low inventory of homes, an increasing demand and unclear coronavirus related restrictions moving forward.
But if you’re looking for a new home in the coastal region, the good news is that historically low interest rates can offset a lot of these additional construction related costs.
For much more on this and any other real estate related topics in the beautiful coastal regions of both Delaware and Maryland, call the Oldfather Group today at 302-260-2000 and speak to a member of the area’s top producing sales team.
We’d love the chance to say hello and see how we can help you on the path to home ownership at the Delaware and Maryland beaches.