Q. We are concerned we may have waited too long because of inflation. It seems nearly impossible to afford our renovation. We got “ballpark” estimates, and just look at each other in wonder when we think about how things changed from before the pandemic. Do you see prices coming down? Should we wait, rethink or do the repairs to our roof that led to doing the bigger job and just live with it? Are some cost increases real or made up?
A. Your decision will be made based on what you’re willing to pay, not on what you can afford. Some prices are dropping, slightly, but as a window representative said recently, if you were a trucker being paid more to haul perishable groceries than windows, which would you choose? Across the board, as the pandemic waned and people went back to work who were being paid not to work, they had to be enticed with higher wages at the same time that the world economy shifted due to war and sanctions. Who could have guessed that the U.S. would become the largest oil producer in the world?
People often look back in their lives and ask themselves, “How did we do it?” when pondering some of the most seemingly unmanageable situations. This is not to suggest that you gamble, but you must project the terms: whether you will need to earn more, and how, borrow more and work longer to pay, settle for a little less, change or abandon the goal.
The cost of any project is the number one question I get, and the most unpredictable, since, even before the life-changing pandemic, construction bids were generally all over the place. It isn’t uncommon to get an extremely low bid against an extremely high one and wonder why. The four primary factors in a contractor’s bid are overhead, labor, material cost and profit. Labor, and the choice of how much to add in for profit, would seem to be the most controllable, while overhead costs and material prices are often not controllable.
As I go about the everyday tasks of building design and construction, I speak with a whole range of people, from real estate salespeople to bankers, developers, contractors and tradespeople to lawyers, material representatives and the end users. The whole picture of where costs are going is influenced by many factors, and trying to pinpoint the cause of fluctuations is based more on people trying to simplify something extremely complex than on looking at a much broader picture.
Energy production dropped and costs increased. Fewer people were driving or working, so debt and prices increased. Add to this a world in conflict and the huge debt of war, and you begin to see that the project you want to do is affected by issues that are far beyond your control. Design can reduce some costs, finish material choices can save money, but only you can determine your willingness to “settle” or go for it. Good luck!
© 2022 Monte Leeper. Readers are encouraged to send questions to email@example.com, with “Herald question” in the subject line, or to Herald Homes, 2 Endo Blvd., Garden City, NY 11530, Attn: Monte Leeper, architect.