Tahoe Boston builders’ headaches include lumber prices, labor issues, land and material shortages
Tahoe Boston builders’ headaches include lumber prices, labor issues, land and material shortages. Builderonline.com recently reported that “latest lumber price hikes add more than $18,600 to new homes.” Last May, feeling the effects of the pandemic, lumber prices soared to $1,500 per thousand board feet. Prices then stabilized a little.
By the end of December, according to Random Lengths, “the price of lumber exceeded $1,000 per thousand board feet, an increase of 167% since last August.” Reasons for the increases include supply chain bottlenecks, doubling of tariffs on Canadian lumber imports and a damaging wildfire season in the western United States and Colombia. -British.
What’s a constructor to do? Catherine Bassick of Boston-based Bassick Real Estate Advisors is a longtime producer who sold the first single-family home for over $100 million in the United States and works closely with luxury builders.
Bassick offers insider insight into the issues Greater Boston builders are facing with soaring lumber prices. “These price increases affect all segments of the wood supply. Between Canadian tariffs, labor shortages at Georgia-Pacific, one of the largest lumber processors, and lenders placing timber reserves on construction loans, the impact on builders is huge. Supply chain issues are causing builders to use the lumber they receive immediately to meet construction deadlines. Bassick’s advice to those looking for a new home: “If buyers find a home they’re looking for, they really should buy it now.”
Moving about 2,900 miles west of Lake Tahoe, luxury builders face various challenges. Clifton Taylor, president of Taylor Builders, is a leading builder in Northern California and Northstar in Lake Tahoe. “In recent years, the Lake Tahoe market has been explosive. Land is a finite resource in the Tahoe area, and because of that, there are only a few viable projects over the next two decades,” says Taylor. “This puts a lot of pressure on existing inventory. At Northstar, there is a strong demand for custom lots and built inventory.”
Lake Tahoe is also experiencing labor shortages in the construction industry as well as shortages of building materials. “What’s happening is that houses are now more expensive to build while also taking longer to complete. People don’t want to hear that it will take three years to build their house,” Taylor attests.
Jeff Brown, owner and managing director of Tahoe Mountain Realty, has been selling luxury residential real estate in Lake Tahoe for several decades. “Weather is the biggest variable for us in this industry. There is a certain lifespan for an asset here. If a homeowner can’t occupy a home for several years, that could be 25% of the lifespan. asset if you’re only looking to own a home here for, say, maybe 8 to 10 years,” Brown said.
It’s no surprise that vacation home buyers in a ski resort want to be able to use that home as soon as possible. “Shortages of labor and materials have a definite impact on raw land sales. Under normal circumstances, the period between acquisition and occupancy, including design, engineering, permits and construction, is about 12 to 18 months. Now it’s doubled,” Brown said.
“We’ve had a number of raw land transactions that didn’t happen. Instead, these buyers bought a finished home that may not have everything they wanted,” adds- he.
Buying a finished home, imperfect or not, is not easy to do in today’s even hotter than hot market.
Bassick Real Estate Advisors and Tahoe Mountain Realty are exclusive members of Forbes Global Propertiesa consumer marketplace and member network of elite brokerages selling the most luxurious homes in the world.