Jan 13

Supply Woes Leave New Homes Unfinished

Supply chain backups for materials continue to hit the new-home market and are causing some new owners to have to move into unfinished homes, The Wall Street Journal reports.

The problems stem from ongoing factory closures caused by the pandemic, transportation delays, and port capacity limits. The shortages are especially popping up in the lack of windows, garage doors, appliances, and paint.

The shortages have been occurring since the pandemic began. Home builders say there’s been little improvement and it is still taking weeks longer than normal to finish homes because of widespread shortages.

About 90% of home builders surveyed in November 2021 said they were experiencing supply disruptions, up from 75% in January 2021, according to Zonda, a real estate research firm.

To try to help counter the delays, some builders are stocking up on products or trying to find suitable substitutes for some materials.

The builder Epcon Communities in Dublin, Ohio, said that some of their buyers moved into their new homes before gutters and downspouts were installed because of shortages. Meanwhile, city officials in Sacramento, Calif., established a policy in November 2021 that allowed builders to close on homes with temporary garage doors due to delays.

Builders with Homes by WestBay LLC in Riverview, Fla., say they’ve started ordering windows six months in advance. Prior to the supply chain issues, they could order them 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 Wall Street Journal. He says the homes are about a month to two months behind their normal schedule.

Materials aren’t just taking longer to arrive but are also costing more. Builders are passing along those increases mostly on to home buyers. The median price of a newly built home in November reached a record high of $416,900, nearly 19% higher than a year earlier.

Image by Paul Brennan from Pixabay

©National Association of REALTORS®
Reprinted with permission

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