Building Materials Shortages, Skyrocketing Prices, Winston Rowe and Associates
Construction material shortages will almost certainly lead to development cost increases and project delays in the multifamily sector as rapidly rising prices continue to trouble the construction industry.
By: Winston Rowe and Associates
NMHC data shows that overall, multifamily costs are rising, with lumber routinely cited by builders as one of the leaders in price increases. Lumber prices surpassed their prior high watermark (from 2018) by August of last year, and overall lumber had increased nearly 90% in price year-over-year by April 2021. Lumber prices have risen 34.3% since December alone.
Industry leaders have begun pressuring the Biden Administration and members of Congress to intervene, and last week Commerce Department Secretary Gina Raimondo vowed to make lumber prices a priority.
Lumber isn't the only material seeing price shocks. Steel and copper and brass mill spaces also began rapidly increasing in late 2020, with upticks of 67% and 49% year-over-year, respectively, and gypsum and ready-mixed concrete remain difficult to obtain, according to survey respondents.
Winston Rowe and Associates prepared this article they are a national consulting and advisory firm specializing in commercial real estate investors. You can check them out at https://www.winstonrowe.com
Winston Rowe and Associates