A soggy summer, supply shortages and an active hurricane season have caused headaches for home builders.
By JUDY STARK
Published September 10, 2004
First it was the long, wet summer that soaked the soil and delayed home construction. Then it was the shortage and price increase of construction materials: concrete, steel, plywood.
Now add two hurricanes and a third on the way that have shut down work sites, cost thousands in cleanup and battening-down of homesites, and postponed closings of completed houses.
All that has added four to eight weeks to the time it takes to complete a home, Tampa Bay builders say.
Mike Bartoletta, a partner in Hannah-Bartoletta Homes of Tampa and president-elect of the Tampa Bay Builders Association, ticked off the chain of events that he said have cost builders time and money:
* Rain-soaked homesites can't be compacted and dried out, treated for termites and prepped for concrete pours. (Rainfall as of Thursday at Tampa International Airport totaled 51.98 inches for the year, with more on the way. The annual average is 44.77 inches.)
* Heavy rains with thunder and lightning came earlier in the day this summer, ending workdays early.
* The nationwide concrete shortage means builders have to schedule their pour dates weeks in advance. If their soggy sites aren't ready on the appointed day, the trucks can't pour, and the schedule is shot.
Now add the delays wrought by Hurricanes Charley and Frances. Some plumbing inspectors, Bartoletta said, have been diverted to inspect storm damage, so new construction plumbing work that is ready for inspection is at a standstill. Utility companies are restoring power to hurricane-damaged areas. "They're not installing temporary poles. They're not putting in new meters," Bartoletta said.
When builders can't get electricity turned on to completed homes and when insurance companies won't write policies for new homes because a hurricane looms, "We can't close 'em," Bartoletta said. "The expenses are still there, and the income ceases."
In Manatee County, David Robinson of Bruce Williams Homes said rain had put his construction schedule "at least two to four weeks behind schedule" even before Charley and Frances. Now he worries about a drainage of labor and materials to hurricane-damaged areas.
His company has raised prices this year an average of $5,000 to $7,000 because of the increased prices and shortage of materials, a figure that builders nationally echo.
"Time is money," said Ralph Zuckerman, president of Avalon Builders in Tarpon Springs. Wet weather cost him two weeks of delay in excavating a site. "With all the rain and delays we've had, it's easily several weeks to a couple of months" longer to complete a home. "On the customer end, you always want to show progress, and you're having to explain the reason for these delays."
As bad as the rain delays are the rising costs: "We're just getting killed with price increases, and I'm a small builder, so every home is important to us." Steel reinforcing bars, concrete block, framing lumber, drywall, gasoline - all have risen in price this summer.
Since last spring, demand at home and abroad, longtime reliance on foreign supplies, limited production capacity, transportation problems and import tariffs have combined to raise prices of building materials. The price of 1,000 board feet of framing lumber hit a five-year high of $472 in early August, up from $311 a year ago, according to Random Lengths, a trade publication that tracks the lumber industry. Panels (plywood, oriented strand board and other panel products) cost $485 per 1,000 square feet in August, up from $440 last year and $253 the previous year.
The price of reinforcing bars has risen 45 percent over a year ago. A ton of scrap steel, which is melted down and recycled into sheet steel to make studs, cost $150 a year ago. Today, it's $290.
The increase in the cost of lumber and wood panels translates into about $5,000 on an average house, said Michael Carliner, economist for the National Association of Home Builders.
Hurricanes will relax some of the immediate demand for building products such as cement as projects are postponed, but that demand will rise as rebuilding begins, Carliner said.
He recalled that after Hurricane Andrew in 1992, prices for plywood, windows and roofing increased by about 50 percent nationwide. That hasn't happened this hurricane season, Carliner said.
A buyer who looked at one of Zuckerman's homes back in January and is now ready to buy might see a price increase of $10,000 "or even more," Zuckerman said. Builders say they are absorbing the increased costs for homes that have been under contract for months.
Some construction loans require buyers to pay the interest, "and they don't appreciate that," Bartoletta said, when two months are added to construction time.
Getting ready for Charley and Frances and clearing up after them have also meant big hits for builders. "The last two Fridays we've spent tens of thousands of dollars on unscheduled cleanups so there's no flying debris" on job sites, Bartoletta said.
It costs $1,000 to $1,200 to have concrete roofing tiles loaded onto a roof ready for installation, and another $1,200 to $1,500 to have workers carry them back down and stack them up so that they're out of the hurricane's way. Then they have to be carried back up when the storm moves on. "We can't get them all off," Bartoletta said. "There's not enough manpower."
No painter will get up on a ladder when winds are blowing at 50 mph, Bartoletta said. But right after Hurricane Charley, he had indignant customers calling to complain, "No one has been working on my house this weekend!"
