Real Estate Marketing & Beyond
Builders are continuing to face material shortages and now, rather than keep people waiting, they’re allowing new home buyers to move in even as the properties remain unfinished.
The supply chain problems are the result of on-off factory closures due to the COVID-19 pandemic, port capacity limits and transportation delays. Due to the shortages, builders have struggled to get hold of things like windows, garage doors, home appliances and even paint.
The shortages have caused problems with the new home market ever since the pandemic began. Home builders say there’s no sign of improvement in the supply chain and that it is taking weeks longer than usual to finish many new homes because of the widespread shortage of supplies.
If anything, the situation is getting worse. A November survey by real estate research firm Zonda found that 90% of U.S. home builders have experience supply disruption, up from 75% in January 2021, the Wall Street Journal reported.
To counter the delays, builders have attempted to stock up on some products. Others have been trying to source substitute materials and products where possible.
Now, some are even allowing new home buyers to move in early. Epcon Communities, a building firm based in Dublin, Ohio, said some of its buyers opted to move into their new homes before it was able to install gutters and downspouts. It had been waiting weeks for those supplies, and its buyers didn’t want to delay their move. Elsewhere, in Sacramento, Calif., officials enacted a temporary policy in November that allows builders to close on homes with only temporary garage doors. It’s assumed the builders will install the doors once they become available.
Builders with Homes by WestBay LLC in Riverview, Fla., said it has taken to ordering windows six months in advance due to the long wait times. Before the pandemic, its standard practice was to order windows just 60 days ahead of time.
“About the time we’re getting ready to pave streets in a new subdivision … we’re ordering windows for 100 homes,” Willy Nunn, president and CEO of Homes by WestBay, told the Journal. He said his company’s homes are about a month to two months behind their normal schedule.
It’s not just that materials are taking longer to arrive though. Limited supply means they also cost much more, and those cost increases are being passed onto buyers. The median price of a new home in November hit a record of $416,900, up 19% from a year ago.
