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93% of Contractors Report Delays in Project Timelines due to COVID-19
The Building Industry Association of Clark County (BIA) reports trends from a nearly 700 member-wide survey regarding the effects builders, remodelers, subcontractors, and suppliers are feeling from the COVID-19 pandemic.
From the month-long shutdown, to the shortage of appliances, to the soaring prices of lumber adding more than $16,000 to the price of a new single-family home, the housing industry has faced some challenges caused by the pandemic. Specifically, BIA members reported that COVID-19 has had at least some noticeable, adverse effect on the following aspects of their businesses:
- 93% of respondents reported delays in project timelines due to subcontractor availability and the shortage of building products and materials.
- 83% of respondents reported shortages of supplies of building products and materials.
- 80% of respondents reported an increased cost of supplies and building materials.
- 73% of respondents reported that they faced some unwillingness of workers and subs to report to their construction sites.
- 70% of respondents reported the length of time to obtain a plan review for a typical single-family home increased.
Despite the negative impacts of COVID-19, members are still reporting strong sales due to pent-up demand, low levels of inventory, and the stabilization of low interest rates. Additionally, 36% of surveyed remodelers have reported seeing more project inquiries with prospective clients mentioning COVID-19 and quarantine as a motivator for a home remodel.
While this seems like positive news for the industry, members are citing concerns over the affordability of housing. Builders are still trying to recover from the loss of revenue related to holding costs on housing developments that were stalled during the work stoppage, inflation of the cost of building products/materials, and the added cost of more than $7,485 per company in adhering to COVID-19 specific safety protocol.
With more than 70% of BIA members classified as small businesses (less than 50 employees), these costs will be hard to absorb. The BIA anticipates that sales prices will continue to climb as the housing inventory in Clark County remains at an all-time low. This means that housing will become less affordable, and more families in Clark County will be priced-out of a home purchase. This is worrisome as the BIA’s most recent estimate of 12,612 households are priced-out of homeownership.