Homebuilders still face supply shortages with rising costs

GEORGETOWN, Texas (KXAN) – Building a home from scratch has become increasingly difficult in Central Texas as many buyers face increased costs and longer construction times.

In Georgetown, Robin Schwab waited a year for her dream home.

“It took over a year to build my house,” Schwab said. “For a while, towards the end it got things like windows and appliances. Wood was a problem from the start.”

Schwab was supposed to get the keys to her new home in June 2021, but that didn’t happen until nearly five months later.

“I think they leaned back. Their hands were tied and they were trying their best,” Schwab said. “It wasn’t their fault. I just never expected it to take a year to start from scratch.”

Supply chain problems and high costs have hit homebuilders across Central Texas.

“It’s about ordering your ducks ahead of time and getting them lined up,” says Jimmy Alley, co-owner of Register & Alley Custom Homes. “We order devices as soon as we start the record. There is sometimes a waiting period of 12 months.”

Alley primarily builds custom homes in the Westlake and Lago Vista portion of the Texas Hill Country. During this period he had to deal with the misery of building.

Pre-ordering is how he keeps track, but he does so with caution. Most service reps only allow builders to order that much. Alley says it can be challenging to get something as simple as an (LVL) laminated veneer beam for 2-story houses.

“McCoy’s, our service representative, only gets so many LVLs per month from the manufacturer,” Alley says.

These problems also lead to higher costs for the buyer.

“We’ve had to change the way we offer homes,” Alley says. “We used to give them a fixed number, but everything is a moving target. Everything has gone pretty much cost-plus.”

Schwab says if she had waited another year to build her house, she probably would have been priced.

“I probably couldn’t have afforded it. My house has skyrocketed. The starting price for the same house, same floor plan is more than I could afford as a single teacher,” Schwab said.

In 2021, timber prices rose to over $1,600 per thousand plank feet. When COVID hit, factories slowed down as workers got sick and new protocols. Industry has also scaled back production, assuming it would slow down like other sectors, but home construction didn’t slow down.

Demand for buildings and insufficient supply led to a price spike. Last year around this time, the National Association of Homebuilders found it was costing over $36,000 more for a new single-family home.

Prices eventually fell last year, but wood costs have risen again since November, almost back to where it was a year ago.

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