Building a Home in California is Expensive – Part 2
Building a Home in California Has Many Expensive Obstacles
Cost of Materials is a Key Factor
If you are exploring the idea of a personal haven in the Golden State, you’re probably wondering why building a home in California is so expensive. Creating your dream abode is a once-in-a-lifetime opportunity. However, the continually increasing cost of labor, materials and permits can make building a home in California very expensive.
As Silicon Valley’s premier construction experts, we are well-versed with the factors that impede new construction in this region. In the first of our 3-part series on this subject, we shared the issues that contribute to rising labor costs. We now investigate the second barrier: the escalating cost of materials.
Part 2: Expensive Materials Making Your California Dream Home Project Challenging?
Almost everything in California is more expensive than the rest of the country. The same holds true for labor, construction materials, permits and government fees for building a home. A study by Terner Center for Housing Innovation suggests that overall construction costs across the U.S. increased by 11.8% from 2011 to 2016. However, during the same period, construction costs in San Francisco grew by 12.6% and in Los Angeles by 13.6%.
Here are some factors that impact material costs in California.
- Basic price fluctuations: Many commonly used construction materials have seen a significant price rise in recent years. According to the Associated Builders and Contractors, Inc. (ABC) analysis of U.S. Bureau of Labor Statistics, April 2019 release, overall construction input prices are up by 2.5% in the twelve months from March 2018 to March 2019. This includes:
- 5.9% increase in fabricated structures and metal products
- 4.7% increase in iron and steel
- 4.5% increase in plumbing fixtures and fittings
- 8.4% increase in asphalt, tar roofing and siding products
- While softwood lumber showed a marginal increase during this period, it had a price escalation of 23% between June 2017 and June 2018.
- Tariffs and trade policies: The imposition of tariffs and possibility of trade wars, combined with rising interest rates is a potent combination that causes construction material costs to skyrocket. For example, the trade policies of the current government have put a hefty price tag on steel, aluminum and lumber. As per the National Association of Home Builders (NAHB), after the levy of tariffs on Canadian softwood lumber, supply falls short of the demand. A tight inventory leads to steep prices. They estimate that rising lumber prices alone contribute to a $4,000 increase in the cost of building a single-family home. While talks of trade deals for steel and aluminum are still underway with the European Union, California’s building material costs have yet to see their impact.
- Prescriptive building standards: California’s building standards and codes are stringent. Contractors must use a specific quality of building materials for windows, heating or cooling systems and insulation, in keeping with the state’s energy efficiency goals. Meeting these standards and codes means sourcing higher quality, usually more expensive materials.
Hire an Experienced Contractor to Build Your Dream Home
At Flegel’s Construction Co., we specialize in constructing new homes that are attractive, functional, and most importantly, built with high quality materials. We are aware that several builders use sub-standard or replacement materials to help clients save thousands of dollars in upfront construction costs. However, in our experience, such homes face several long-term issues, including warped walls, cracked plaster on internal and external walls, warped decks and uneven floors.
Our skilled team works to your exact specifications to deliver your dream home with speed, efficiency and quality. Happy customers in and around the Bay Area are enjoying stylish, comfortable spaces, suited to their lifestyle. Now, it’s your turn!
Building a home in California is expensive, but isn’t that true of any dream home? Don’t give up on your dream. Call 408-269-1101 or contact us online to discuss your project.