We have had a few customers who bring up the Brass Brick and Bridgeport stories — they are worried, but we gladly give them references of customers, our banks and our vendors,” Lyon said. "It is our job to show them that now is a great time to buy, interest rates are still low and costs to build will only be going up.
If you look at the historical trend of actual costs to build, an increasing trend generally holds true. The largest impact we’ve seen lately is tied directly to oil and fuel costs, given how many products are petroleum-based, not to mention all of which require delivery to the job site.
That is starting to ease a bit, at least in the sense of fuel surcharges, which I now refuse to pay anyway.
What you’re referring to, though, in regard to the trending in the real estate market has nothing to do with cost to build, but rather with supply and demand of housing as an end product. Could a continued downward trend in sales or home values have an effect on supply costs? Probably. But less from the standpoint of cost of materials than a re-evaluation of the materials being used in construction. At least that’s how it goes in the circles I know. Just because a house’s price drops doesn’t mean it will result in a cheaper way to make a brick.
Hey Jeff,
I am curious about the last statement.
“...and costs to build will only be going up.”
With the housing and commercial real estate market trending down across the country (and world), why would costs to build keep going up? Just wondering if there is something I am not seeing here.
Hope you are well and glad to hear there is still some positive movement in the OKC housing market!