Here’s how a lumber shortage is causing home prices to skyrocket.
If you didn’t already know, we have an extreme shortage of home inventory and an extreme shortage of lumber to build new homes. This is driving up the cost of practically everything that involves wood, including building a new home. The average house costs $25,000 to $35,000 more to build than it did just one year ago.
What can you do about this? Some people are deciding to wait it out. You also have the opportunity to buy a resale home. Those who are waiting it out want to see if prices will fall back down. They will, eventually, but I don’t know if they’ll ever get back to where they once were. Our demand has only strengthened, so it would take an enormous amount of supply to bring costs down.
If you’re set on purchasing a new construction home, realize that while the cost of building the home is higher, we’re also seeing a ton of appreciation. In two years, the cost of lumber might come back down, but the home you buy now could be worth even more than that. It could end up a wash or even a loss. The median sale price in Fort Wayne has gone up by about 16% in the past months, and we expect more strong appreciation in 2021.
If you have any questions about buying a home in this market, building a home, or anything else related to real estate, don’t hesitate to reach out via phone or email. I look forward to hearing from you soon.