In January of 2020, prior to the rise of the global pandemic caused by Covid-19, lumber prices were hovering around $400 per 1,000 board feet.
Today, that same 1,000 board feet of lumber costs around $1,000, or roughly 2.5 times the cost. And as recently as May 2021, the price of lumber was more than $1,600 per 1,000 board feet.
To say prices have gone up and are changing rapidly is an understatement.
These price changes have had a direct impact on the Southern Indiana real estate market. Lumber packages for new construction homes have helped drive the price of newly constructed homes upward which in turn has pulled the price of existing home values up with them.
As evidenced by the chart below, we can see the average sales price in Southern Indiana has risen from under $190,000 in January 2019, to over $255,000 in December of 2021.
If you couple the rising cost of building materials with the shortage of the number of homes for sale, it has created a difficult, albeit not impossible, environment for home buyers.
We wanted to get the perspective of a local expert to see how these things are impacting local home builders and to see if they would be able to help offer some relief to Southern Indiana buyers. So we sat down with Kent Witten of Witten Builders to get his insight on the current market. Watch our interview below:
A variety of factors have led to supply shortages for lumber (and other materials) with shutdowns from the coronavirus leading the way.
But more recently, flooding in British Columbia in Canada, truck driver shortages, and a vaccine mandate placed on Canadian truckers has only served to exacerbate the problem.
Many experts predict that supply chain issues will continue to be a problem throughout at least the first half of 2022 which will may lead to more price inflation.
For now, Southern Indiana home builders, like Witten Builders, continue to move forward with construction plans despite some of the added challenges. And while there may be some building delays that making construction timeframes longer, local builders still seem to be hitting their construction goals.
This is welcome news for homebuyers who are desperate for houses to buy. As Kent mentioned, they are getting multiple requests for bids each week so demand continues to stay strong.
Our hope is that local builders can continue building at a steady pace to give some relief to buyers all across Southern Indiana.
If you are considering buying a new construction house or would like to consider having a custom home built to your specifications, a meeting to discuss your vision for your new home is the best place to start. If you'd like to take the next step, reach out to us at 812Living@gmail.com and we can connect you with the Witten Builders team.
If you'd like to learn more about Witten Builders, their homes, and the subdivisions they are building in, visit https://wittenbuilders.com for more information.
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