An Update on the Tahoe Construction Market
Written by Christian Edwards of Timberline Construction
As we all know, the pandemic has gotten many folks thinking about where they live and what they want in a home. For us living in the Tahoe-Truckee area, it has meant an unprecedented amount of new builds, mainly from folks that have recently purchased lots in the area and also full home remodels, mainly from those who’ve decided to spend more time in their second homes.
While this demand is great for business, it means building is more expensive than ever, and finding a great contractor may mean waiting 12 months+ to get on their schedule.
At the beginning of 2020, I was quoting $450/SF for new build construction costs. Since demand is way up and supply for materials and labor is down, prices are going through the roof! I now need to quote $550/SF to maintain my revenue and profit levels. This difference in cost/SF amounts to +$300K for an average 3,000 SF home.
Lumber in particular has seen a huge increase in cost, up about 2.5x since March 2020. Many mills dropped production right as the pandemic hit and of course that’s right when demand started spiking. On average, this increased lumber cost will add ~$30-50K to a custom home… And of course, it’s not just lumber, a national report indicated that garage door costs are up +11%, insulation +25% and the lead time for windows has gone from three weeks to 16 weeks.
Photo: Erskine Photography