As the first of the year has just passed, I have received this year’s price increase letters from my suppliers.
This has led me to some stark conclusions.
This is the reality in chronological order of construction.
*Land prices up 100% in a few years.
*Excavation up due to fuel costs
*Foundations up due to China taking all the steel and concrete as well as the increased energy costs to produce and deliver them in the first place.
*Lumber due to environmental and supply costs as well as the costs of transportation.
*Subcontractor costs due to increases in the price of copper and other metals and the energy costs to produce and deliver them.
*Drywall- same thing
*Windows- same thing (petroleum based)
*Roofing- same thing (petroleum based)
*Paints and stains-same thing (petroleum based)
*Steps, concrete driveways, asphalt, retaining walls- same thing.
*Demand exceeds labor force, so if you want it built you may have to take whoever can do it in a timely fashion.
*Interest costs exceed 2k a month by the time you are 1/2-3/4 finished with a project depending on the project.

Many things are combining to make the situation what it is.
While home prices have risen a lot, builder’s prices have risen as much or more. For example, Drywall prices have risen 11 times in the last 12 months.

What we might term "affordable" based on historical Wenatchee prices may no longer be possible even if land was available at historical prices.

Mr. E, Thank you for the comment. This is excellent information and way too valuable to hide in the comments section. Do you mind if I extract it and create a new post? Do you have any recommendations for buyers looking at new construction?

My comments were more or less a bird’s eye view of the last 3 years as a lens to the future. You of course know what land values have done in that time frame.
An example of local price increases is the last letter I received from a local concrete batch plant saying concrete prices were being increased an additional 4 dollars a yard as well as increased fuel surcharges.
These days more and more bills are coming with fuel surcharges.
I just purchased 8k worth of tile and travertine for a project. You pay the price + the shipping + the fuel surcharges. Same with getting drywall delivered and carpet ect.

I am sure you are aware of the last few years rash of vandalism and theft of copper and other valuable metals from farms, jobsites and individual homes.
Copper has become valuable enough to steal. It is no wonder that electrical installation prices are affected.

Cement and steel shortages and increased prices have been happening for a couple years from the majority of these materials being shipped to China for all the massive projects that they are currently constructing. The same supply and price issues we have dealt with due to Hurricane Katrina and the rebuilding of LA and Mississippi

Any product or service like excavation companies that uses large amounts of fuel are adjusting their prices to maintain the same income their business needs to grow.


Many people have read about these types of things and yet up till now have not realized how it affects the cost of home construction.

Bidding plans has become a guessing game since there are often 3-5 months between the time a sub contractor gives you a bid (for financing purposes) and actually starting work. With the prices of materials being somewhat volatile over that length of time, bids are only usually good for 30 days.
When the price goes up and the bid has expired, it is usually the contractor that gets blamed for the price increasing. He has to eat the difference or bid blindly hoping he has allowed enough for that contingency.

The price of lots locally has appreciated more than fast enough to handle the increased cost of land development.
And I want to say as kindly as possible that the increase in property values has helped realtors in general but I don’t believe their costs to sell a house have increased.

Builders however have not seen their margins increase because of the cost of materials, interest rates, fuel surcharges, and a net increase in the cost of selling a home relative to the profit margin.

An example might be a friend of mine that builds more entry level homes. He has told me that on a entry level home he figures he makes as much building it as the developer makes selling the lot and about as much (sometimes less) as the realtor makes from selling him the lot and then selling the home too.

He laments he is the one physically constructing the home while also taking all the risk and liability for the project.

I don’t know if that is completely true or not but I completely understand the concept. I have also seen a net increase in the cost of selling a home relative to the profit margin.

I don’t know of any real solutions, but an increased understanding of the issues involved can only help everyone involved.

I have composed another reply 3 times and every time I get toward the end my server kicks me out. Now I'm getting really ticked off. I'll get back to you with a reply when I have the time (and patience) to compose it one more time.

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