A client asked me if there were any new construction homes for them to see as we headed out today. I had to think about that one. Typically, I can run through a handful of homes being built throughout Wellesley, Weston, and the surrounding area--but this time, I couldn't think of one in their price range. The reason is that like every other buyer, builders are also having a hard time finding tear downs. We don't have readily available land without structures on it, so they are shopping for homes that can be demolished to make way for a new construction home. In a bidding war, builders can lose out too. They are giving it their best shot though, paying unheard of prices for the land.
That's not the only problem that builders are facing. Rising costs of materials and delays in getting them delivered is also hampering their progress. In addition, finding additional workers to help is a problem in construction because the demand is so high and many workers have been hesitant to return after continuing to receive generous unemployment benefits. Builders, plumbers, and electricians are so slammed that it's hard to schedule them on a timeline.
All of this has its toll on the consumers, too. If you have a new construction home under agreement, closing dates are frequently delayed. I know that first hand, and have seen dates being pushed out months at a time as builders wait for lumber and other critical materials to arrive on site. In turn, a consumer has to extend their rate with a bank to hold onto the property. Fortunately, home prices keep rising so they get that benefit of locking in a buying price early, but that equity only comes out if you are selling. It's certainly a frustrating situation all around.