Thanks to the hurricanes, and probably the War, our architect said the cost of building materials has gone up about 30-40%. This is putting even our modest new home(in Maine )out of reach. We do plan to use sweat equity to finish the interior over the summer, after the house is secured to the elements.
I know no one has a crystal ball, but any advice from the professionals on whether we should wait a bit, or compromise seriously on the design. I know labor doesn't go down.
Thanks for any feedback.
Meg

Hi Meg:
I am a custom home builder in Hawaii and in California - two of the most expensive places in the U.S. What I recommend is that you do it now as the materials, insurance, freight are all scheduled to rise. Steel has gone up 114% since January (2004) and most of it is going to China. Cement is going up 30-40% as we speak.
Bite the bullet and do it now - it will probably never be cheaper.
Build with 'systems' that reduce labor - if you need more information, contact me at: shellbld@hawaii.rr.com and I'll give you some ideas.
Regards,
Gary Radzat
Shell Building Systems
http://www.shellbuildingsystems.com

I insure homes based on guaranteed replacement cost, meaning that I impose no maximum limit on cost to rebuild. So I have to keep a close eye on these changes in cost of materials.

Thus far, I have not noticed materials costs outside of Florida coming back down as time since the last big hurricane passes. In Florida the cost of labor and materials have been so inflated that prices there are gradually coming down as demand slackens. But here in Virginia I've found that prices went up a little bit and stayed there.

Nobody is seriously expecting peace any time soon either (Iran now seems to be on the agenda), so the demand for materials being sent to the Middle East isn't likely to slacken.

The price of oil has a lot to do with this as well. For a long time suppliers assumed that the record high prices for oil were only temporary and didn't adjust their pricing for construction materials to accomadate the increase in transportation costs. But the sense of permanence did recently set in and the higher transportation costs have now been added to wholesale and retail prices. Diesel fueled vehicles have become so popular among ordinary consumers that even the price advantage that commerical trucking had by using diesel has pretty much evaporated.

The bottom line is that prices for construction materials are not coming down in most areas. The best you could hope for is a collapse of the new housing market when interest rates get high enough, leading to a drop in demand & prices for materials. But that is pure speculation. Don't wait to build in hopes of a price drop.

-Jack

hi Meg, if you don't know it, check out the small house society on yahoo.com. people are building themselves quite economically. jeanne

I have a contractor we used for a duplex conversion for a place we rent to relatives. Happy with him, feel safe working with him again, etc. Now we need to remodel/do extensive repairs on our main house. He is interested---but very successful in this area now, and not available to us until summer 2007. For financial reasons however we should get our loan by July 2006. How can we make best use of the time until summer '07? Are there any ways we can use that extra time to actually hold costs down? Looking for better deals, buying certain building materials ahead of time, etc? Any thoughts on this conundrum?

athene