Not only the local, but the national buzz is quickly turning to answer the question – At what point as we hit the bottom of the construction cost index, are the returns diminishing? Both private and public projects that have pushed the envelope of contracting at the lowest cost are starting to find out how low is too low.
As a last gasp for air, many contractors have been supplying bids that unfortunately can’t be completed for the contracted price. Without the funding reserves left in the company, the contractors are walking away from the projects having already overbilled the Owner. This is leaving Owners with no choice but to hire another contractor to finish the project, inevitably at more cost than the project was originally worth.
Both Contractor and Owner alike need to be careful on how far we push the envelope to secure the “lowest price” for the project. With a pile of irresponsible bids floating around, we certainly have a responsibility to flush these out and push for the best value with reputable contractors and tradesmen.
As many already know, the bottom of the market is one of the best times to make a great return on the dollar. Just like the market at it’s peak, we have to be careful on how great a return we are hoping to push for. We should all capitalize on the great current construction rates; but keeping in mind, it doesn’t take much to cross the line of diminishing returns.
The news shows have declared the recession is over!! If they are correct right now is the time to move. The price to build a log home is the lowest it has been since we started in the business. Labor and materials are at a point where it is very advantageous to build. We are offering big discounts for log packages and for construction if a buyer is able to move quickly.
Low interest rates, high inventories are good news for buyers
Despite the jittery economy, experts say that now is a great time to consider building a cabin. Interest rates are at a four-year low, builders are eager to work, and material suppliers have inventories they need to move. This may be the last time we see these rates for some time to come.
“Many log home companies are working very hard to keep their pricing steady and in line with the current economy.. “This, plus the savings that can be gained because building contractors are competitively looking for work, makes this a great time to build.” Translate that to mean the construction industry is ready to tackle work now and you may be able to pay best-dollar rates.
A slowing economy has affected all segments of the construction and home sales market, but the vacation home arena seems least immune from lasting damage.
“The increase in oil costs have hurt every industry and the economy has slowed things down, but Baby Boomers are not the same as first time home buyers and are now positioned to build for their retirement or vacation home.
Log homes continue to attract second home buyers and have an intrinsic value that separates them from the primary home market. Certain parts of the country have actually experienced an increase in sales and have passed on their good fortune on to the customer.