Are high prices the new normal? | Herald Community Newspapers
By Monte Leeper
Q. Why are the prices so high? I know we can blame the pandemic, but I wonder if prices are really going to drop again, or if this is the new normal. We are trying to decide whether to start our renovation or maybe wait until the fall. Is it supply and demand because so much work is being done, or is there more to it? We just don’t know what to do.
A. Construction in general is a leading indicator of how the economy is doing, especially since so many other jobs and industries are supported by the demands of construction. Everything from building materials, food, work clothes, tools, transportation and furniture, has been linked to an upward trend in construction. But there is often more to the story than just one aspect, and this is also the case with construction materials.
While the pandemic caused a slump in demand, as construction halted in the spring of 2020, when it slowly resumed, production was slower to respond due to a potentially protracted recession expected. Because the unemployment rate was extremely high and goods and services were expected to recover very slowly, many producers opted to reduce inventory so that there was ultimately a lack of goods to ship when orders poured in. That was the supply and demand part of the equation. Supply fell, so the cost of what was available went up.
But there is much more to it, as there almost always is. As a history student, I am always amazed at how much an individual can influence a large population. Personalities and their special knowledge, or lack thereof, can also have an effect. Just uttering derogatory statements, swearing and undiplomatic bashing can have a subtle but far-reaching effect.
Adding rates to create “a level playing field” is another possible reason for rising, tripling costs for things like wood and cement. According to the National Association of Home Builders, the average cost of a new single-family home has increased by $ 24,000 since April 2020. In a turnaround less than a year ago, the Department of Commerce has taken action to lower tariffs on coniferous wood. wood from 20 percent to 9 percent, and focuses on other building materials that affect house prices. Although it will take the summer for prices to adjust, there is hope that the cost of wood will fall again.
Many consumers were reluctant, but determined to continue with their planned projects. I haven’t seen anyone decide to wait. If you decide to hold out a little longer, take the time to make more specific decisions about things like door hardware, plumbing fixtures, and types and styles of finishes. Allow reasonable time for the licensing process and, if possible, avoid the stress that most customers place on themselves. My dear customers have created files of items they’ve selected, including colors and where to buy them. Good luck!
© 2021 Monte Leeper. Readers are encouraged to send inquiries to email@example.com, with “Herald Question” in the subject line, or to Herald Homes, 2 Endo Blvd., Garden City, NY 11530, Attn: Monte Leeper, architect.