Supply Chains, Shortages, and Shipping - Oh My!
What You Should Know About Buying a Home in Summer 2021
If you've spent time searching for a new home lately, you've probably noticed that the housing market is hot! This comes down to several unique issues: low levels of used home inventory, near record-low mortgage rates, supply chain delays due to weather and the effects of the coronavirus pandemic. The current buying and selling season is definitely different, but you shouldn't fear the unknown. We are here to fill you in on what is going on in the market!
What Happened to the Supply Chain?
Take heart all ye interested home buyers - Southwest Missouri and Northwest Arkansas are not the only regions experiencing severe shortages o f materials. Unfortunately, it is a nationwide issue. Remember when Houston froze over in February? Well, it just so happens that 90% of the resin in the nation is made there! When the ice storm came through and their pipes burst, the majority of their materials were ruined and they are still rebuilding.
That might not sound like it would cause too many issues - resin can't be in that many things, right? That's what we thought too, but after talking to our Purchasing Manager, Tom Nobis, he helped walk us through just how important resin is to many of the materials required to build a home. Resin is in all kinds of crazy things you wouldn't expect - from wall paint and bathtubs to showers and siding!
Combine that with the general delays caused by the pandemic and the shipping container cargo that got stuck in the Suez Canal for over SIX DAYS, disrupting the global supply chain (How crazy was that?), and you have a delay in shipping and material production that affects all parts of the construction process. So, how does all this impact your home's build process?
Here’s How We’re Adapting
The effects of bad weather, global shipping disruption, and the coronavirus pandemic have caused supply chain issues for the construction industry. Our purchasing team has pivoted to spending the majority of their time sourcing materials and hunting down the items our build team just can’t keep in stock. In order to keep up with the increased demand and handle the shortages, some of our vendors are also limiting the quantities of material that can be bought or increasing the pricing. But that hasn’t stopped us from remaining dedicated to making homeownership attainable for everyone – we've just had to get more creative:
• Over Memorial Day weekend, our Purchasing Manager, Tom, went to Menards, Lowes and Home Depot on his vacation and purchased all the mirrors he could find and shipped them back to our builders.
• During the same holiday weekend, our Data Specialist, Lorenzo, took the opportunity to check out the available mirrors at Lowes and Home Depot in his hometown of Topeka. They had several available, so he did what any good Purchasing Team member would do – he loaded up a dozen or so and brought them back in his car!
We don't tell you these stories just to brag on our amazing purchasing team members, but also to give you an insight into the hard work and dedication that goes into ensuring our build team has all the materials needed to build your home efficiently and on-schedule.
Your Home Still Meets the Schuber Mitchell Standard
Our top priority is always to ensure that the quality of your home is built to the highest possible standard. One of our core values at Schuber Mitchell is excellence. This means that we perform the highest quality work in any given situation because what we do impacts others both now and in the future. This is why building quality homes for a price that is attainable for everyone is important to us. We don’t let setbacks and material shortages keep us down!
At Schuber Mitchell, we are committed to sourcing high quality materials for your home – in the middle of a pandemic, during a global material shortage, and someday hopefully soon when the world returns to normal. No matter the conditions, we stand behind our work and are proud to offer you a home built with excellence.
Is now a good time for me to buy a home?
Now can still be a good time for you to buy a home! While the overall price of homes has increased, those amazing interest rates we’ve been seeing for the last year are still low enough that they are able to help offset the higher cost caused by these supply chain issues. This is great for a homebuyer like you because we have hundreds of quick move-in homes that will be ready for sale by the end of the year, allowing you to take advantage of those interest rates and get into a home that fits your family’s needs!
So, here's the million dollar question: What is happening with these prices? The current increase in pricing is due to a combination of many of the factors we have already discussed; the rising cost of materials will always lead to an overall higher cost to build a home. However, we have to go all the way back to 2008 to find out what the other factors are.
Because the market has not had any appreciation since the housing crash of '08, the higher prices we are seeing now are likely the market correcting itself after that crisis. The amount of equity that Americans have in their home is just now beginning to approach what we would consider a "normal" amount for the housing market, and the housing boom caused by Covid-19 has allowed us to see a return to normal appreciation of housing as a commodity. This is good news for both homeowners and homebuyers alike, meaning that your home will continue to be a valuable asset!
We wish we had a crystal ball to tell you the future, but we can tell you that you will always get a fair price from us and that the price on your contract the day you sign is the price you will pay when you close. Though we can't predict the future of pricing, the current lows in interest rates offset the increase in pricing and the trend in the housing markets right now are predicting a continued rise in the cost of homes - making now still a good time to get into your dream home.
Our build and purchasing teams have been putting in so many extra hours, changing how they do their jobs, learning new skills and ways to source materials, and giving up time on their holidays and weekends to ensure that your Schuber Mitchell experience is nothing but excellent.
