In his recent NADRA blog, Bobby Parks writes, "Even though we continue to deal with labor shortages and the added challenges of material increases and availability issues, actually putting jobs on the board has been pretty easy for most contractors. For now at least. Up to this point, even though costs to build new homes have increased, low-interest rates have helped home buyers accept the rise in price as the actual increase in mortgage payments has been marginal. However, as interest rates begin to increase, demand could begin to flatten out as the combination of increased monthly payments becomes more significant, and qualifying for loans may come into play. And slow down in demand would contribute to allowing the production of materials to begin catching up and alleviate availability issues. How long this takes and what combination of factors it takes to get there remains to be seen. It is a complicated scenario that is still being determined and creates additional complications for comps and appraisals, not to mention quoting jobs."
His advice on how to plan for a volatile market and uncertain future? Getting back to the basics and adopting a business approach with sound fundamentals will be a more reliable strategy in the long run than counting on the current abundance of customers to continue.
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