New Home Builds – Increased Costs and Longer Timelines
Across the nation, home building projects are increasing, and permits are being put in to expand communities. The same is happening in Northern Nevada, but the COVID-19 pandemic has put a strain on the supply chain, pushed back deadlines, increased costs, and made new home builds a lengthier and costlier process.
Reno home builders have received various letters alerting them to price increases on the materials they need to complete a project, price increases on labor and truck rental fees, and extended timelines to receive materials.
The pandemic accelerated the housing demand in Reno. In part due to Reno’s growing economy and ability to bounce back during hard times, the increase in millennials starting families and joining the home search, and the rise of remote working positions allowing people to live in cheaper cities while working for companies with headquarters in more costly states.
The need for new homes is only increasing, and the supply of homes on the market is at a standstill. Freddie Mac released an estimate at the end of 2020 that said the U.S. housing market was short 3.8 million single-family homes, roughly 50 years behind in supply levels needed to meet the long-term demand.
Unfortunately, builders are facing hardships to not only obtain the supplies they need but to find the workers they need to complete their jobs. Construction costs have increased roughly 20% to 25% in the last year and a half, and it’s not just lumber that builders are having a hard time getting their hands on. It’s vinyl, garage doors, concrete, appliances, and more.
While it is a challenging time for home builders, new developments are still in the works to meet the estimated population increase of 100,000 residents coming to the Reno-Sparks area in the next decade. This projection comes from the Northern Nevada Economic Planning Indicators Committee. There’s still a big push for new homes in the Reno area, and the Reno real estate market is expected to remain strong for the foreseeable future.
If you need more information on what this means for the Reno real estate market, or if you need to buy or sell a home in the current market, contact the David Morris Group. We’re happy to be your helpful guide. Give us a call at (775) 828-3292.
