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Nebraskans building new homes face steep increases in costs

Supply chain, labor issues impacting home industry
Posted at 6:22 PM, Feb 09, 2022
and last updated 2022-02-09 19:22:43-05

OMAHA, Neb. (KMTV) — New construction has completely changed over the last 24 months, primarily based on supply chain and labor issues.

It's difficult for home builders and general contractors to predict what a house will cost in terms of construction goods.

Omaha resident Kary Wurth is currently in the bid process of remodeling her home and is overseeing the build of her parents' house.

"We're seeing a lot of stuff that just isn't available and so, you know, if you're doing something like a remodel, especially if you're putting a lot of money into it, you really want to get the things that you want, that you love to complete your project. So it's a little disappointing from that angle," Wurth said.

Her husband Paul Wurth, who works in construction technology, lays out some of the issues general contractors, builders and consumers face.

"Right now, the average home builder/remodeler is booked out for about a year or two for work. Jobs are taking longer and a lot of it has to do with the supply chain. For instance, right now in some markets, cabinets are taking 24 weeks to be made and delivered to the job site," Paul Wurth said.

This "new reality" is changing how construction companies and home builders complete projects.

"Typically they set a schedule from the beginning of the job and lay it out based on their process. Now what's happening with the supply chain issues, they're picking the point in which they can finally get harder sourced materials and working back from there as it relates to the schedule," Paul Wurth said.

Since supplies are taking longer, the amount of time it takes to build a house gets delayed, and prices keep rising every month. It's mind-boggling to real estate agent Shelli Klemke.

"We saw — in one month — a single home go up $17,000 in just lumber alone. And so to tell a buyer we just agreed on this price this month, and now to come back and say it's 17, 18-thousand alone in lumber alone, it's shocking," Klemke said.

Klemke recommends new homeowners set aside 20% to prepare for any possible increases.

"The increase from last year on existing homes is about 17%. The average on increase in construction is almost double that," Klemke said.

Ultimately, if you're building or remodeling, communication with your team is key to navigating uncertainty.

"Being very direct when you're in these manufacturer designer centers and asking right away 'what is your inventory like? Is this sink, faucet, or cabinet or whatever you're looking at - is it available now?' " Paul Wurth said.

"Trust your builder, so the builder or remodeler, you must have some faith or trust that they really are looking out for you," Klemke said.

Paul Wurth is also Chief Revenue Officer of RenoRun, which streamlines the supply chain process for builders. It's opening a new headquarters in Omaha with more than 100 job openings in the next 12 months.

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