Gabe Thomas has 53 lots to sell in the new housing development he’s building in Hixson, and 73 people on a waiting list to buy them. But there’s a hitch in that plan.
“We’re not even really letting people take lots because we don’t know what the cost is going to be,” says Thomas, the founder of RP Homes. “We are not pricing anything until we know we can hit that price.”
Dramatic increases in the costs of building materials — including a run-up this spring that had framing lumber selling at nearly four times its normal price — have builders across the country puzzling over how to estimate expenses and price their new homes.
Jennifer Dorsey, the president of Pratt Home Builders, has been with the company for 18 years, and has never seen anything like this, she says.
“I was in the industry during the market crash in ’08 and survived that, and that was the biggest event that had happened in my career until 2021,” Dorsey says. “My background is estimating, and it’s definitely the most challenging year I’ve ever been a part of.”
Through the roof
Supply and Demand
A combination of factors has contributed to the problem, including manufacturing shutdowns during the pandemic, a shortage of drivers to haul materials, and increased demand for building materials — just as supplies were getting tighter.
Last fall, Junior Boehm started seeing the lumber shortages looming on the horizon, and he bought…