The rebuilding process in southeast Louisiana following Hurricane Ida is likely to lead to delays and higher costs for homebuilders and buyers in the Capital Region, the head of the Home Builders Association of Greater Baton Rouge says.
“A global pandemic coupled with natural disasters have exacerbated the supply chain and labor challenges,” says Karen Zito, the association’s president and CEO. “Acute shortages in some building materials have skyrocketed prices.”
Home construction already was one of numerous sectors dealing with supply chain problems and a labor crunch. Most builders have raised their prices on homes and have been pre-ordering materials to combat rising costs and shortages, and many have implemented escalation clauses in sales and construction contracts, Zito says.
Lumber prices have come down a bit recently, though they remain higher than pre-pandemic levels and the dip has been offset by increases to other building materials.
According to the U.S. Bureau of Labor Statistics Producer Price Index, the prices of goods used as inputs to residential construction including and excluding energy have risen 19% and 12%, respectively, year-to-date. For comparison, prices for consumer goods were up 5.3% in August compared to August 2020, according to the Consumer Price Index.
Todd Waguespack, managing partner for Baton Rouge-based Level Homes, says his company has been “doing fine” when it comes to maintaining its workforce, but he expects to lose people seeking work in the post-storm recovery, at least temporarily. He says he saw a similar dynamic play out last year when Hurricane Laura devastated southwest Louisiana.
Waguespack also has been dealing with supply shortages, a problem he fears will only get worse in Ida’s aftermath. Windows, garage doors and appliances are among the items that have been difficult to get, he says.
“Every day it’s a different battle,” Waguespack says.