The residential construction industry continues to face expensive and delayed materials due to supply chain disruptions, while the Las Vegas Valley housing market remains warm, according to industry officials.
The result is that building and renovating homes is “10 times more difficult than two years ago,” said a contractor, even with high demand.
The influx of willing buyers, along with materials that are still hard to come by, are driving a tight supply, construction delays and rising costs, the contractors said.
“Anything you can imagine walking into a house (being affected) because people say can you give me a list of what’s hard to get?” It’s like it depends on the day of the week, ”said Nat Hodgson, director of the Home Builders Association of Southern Nevada.
Materials costs rose more than 14% from January to October 2021, according to data from the National Association of Home Builders. Lumber, a commodity that gained national attention in the spring for peaking over $ 1,600 on the NASDAQ before dropping this summer, is climbing again to nearly $ 1,100.
Price increases are widespread and not limited to a particular part of the house or a material, according to builders and contractors.
For Brass2Copper Mechanical, a plumbing and fire safety contractor in southern Nevada for about 35 years, prices for materials, especially petroleum-based, have risen 8 to 50 percent, the vice president said. and Managing Director George Larimore. This has led to contractors – normally competing with each other – to work together by selling equipment and adopting more collaborative methods, he said.
The challenge is the limited availability of products and people. Manufacturing processes for some materials have been disrupted by pandemic lockdowns around the world while others are taking longer to arrive due to shipping delays.
“Out of stock in just about everything”
John Compagno, president of Renovations of Las Vegas Inc., said scarcity can be seen in small supplies of high-end appliances. The skilled workforce is also declining, as workers demand higher wages or get poached by other companies, he said.
“We go to plumbing supply houses and find out they don’t have fittings,” said Compagno, a luxury home improvement contractor for 37 years. “They’re out of stock in just about everything. There are coins and coins available, but it’s pretty hit or miss. There is certainly not an abundant amount of anything.
This is especially difficult because the solutions to price increases and delays – placing larger orders and keeping a well-stocked inventory – have also been limited by suppliers and manufacturers.
“You can kind of compare that to the toilet paper shortage. At one point, people were only allowed to buy six rolls, ”Larimore said. “Now we are only allowed to buy a certain amount of pipes. We cannot necessarily accumulate material as there is an allocation that takes place with many suppliers and manufacturers.
The market remains relatively affordable
Despite all the obstacles, demand is strong not only for new homes, but also for existing homes.
Median prices for previously owned single-family homes hit another monthly record in November at $ 420,000 in the Las Vegas Valley, according to Las Vegas Realtors, a trade association.
Builders and contractors say out-of-state buyers still view southern Nevada as affordable and a tax haven compared to more expensive states. Low interest rates, rising wages, and remote working have also encouraged people to spend money on their homes.
“Although things are sometimes difficult with the shortage of workers and the cost of materials, on the other hand, we are very, very busy. So it’s a bit of a lag, ”Compagno said.
Hodgson is hopeful the region remains relatively affordable and the conditions will set in for the market to take hold.
“The good news is, coming from Southern California, we’re still affordable,” Hodgson said. “We are not where we all want to be. But, you look at our people in the west – I mean, we’re way below that. I want (the prices) to stabilize. Jobs make more money, so stabilization is my goal right now. “
McKenna Ross is a member of the corps for Report for America, a national service program that places reporters in local newsrooms. Contact her at [email protected] To follow @mckenna_ross_ on Twitter.