Augusta, GA (WJBF)- Right now the real estate market is booming. The demand for homes is high and many are only on the market for a short time before they are under contract.
However, buyers are looking for older homes instead of new builds. Why? Because a home they could have easily a fforded six months ago is now out of their price range.
Real estate agents and builders say the cost of building materials have sky rocketed. Since April 2020, the price of lumber has increased by 250 percent nationally.
Bobby Jones is a builder and he said there aren’t enough employees to keep up with the demand for new homes. He said there has been a decrease in sales of new builds and people are buying older homes to avoid the higher cost.
Chip Lamb, a local real estate agent with Franke Real Properties, agrees. He said property values are increasing as well.
“The cost of materials is one… which came first, the chicken or the egg? Because you’ve got the cost of materials going up because the demand to build that new housing is so high. Which also then drives up the prices of existing construction, be it residential or commercial,” Lamb explained.
Jones told NewsChannel 6 that the materials for a deck he priced for a client 6 months ago is now more than six times the cost.
“Well, even builders now are getting to the point where they can’t sell their new construction because the mortgage companies can’t appraise them. And if you can’t appraise it, you can’t sell it. There are very few cash buyers for houses over, say, a quarter million dollars,” said Lamb.
Lamb said the cost of materials can’t go up much more but that it will be a while before it stabilizes. Jones agreed and said he didn’t see those prices coming back down much, if at all.
Photojournalist: Mark Gaskins