2021 - A Real Estate Market With Staying Power

Dated: April 30 2021

Views: 45

Prices Of Almost Everything Are Going UP

 

My eyes have been peeled on the cost of things lately.

 

Since moving to Delray beach in 2015, I've been tracking the cost of food like a hawk (I was interested in how the cost of living would differ here compared to our 13 years living in Costa Rica).

 

We've average $645 per month to buy my family groceries. But over the last year it's up to $720 per month. 

 

Last year gas was near $2.20 per gallon. Today it's about $3.19. Oil a year ago got down to $10 per barrel one day... but today is hovers near $60. 

 

As for real estate, the price of lumber has gone ludicrous. In 2018, lumber was about $300 per 1000 board feet. Today it's about to reach $1,200. That's a rise of about 400% in just a few years. 

 

A homebuilder friend in Southern California posted the other day that a 3/4 inch piece of plywood is $95.98 at Home Depot. A year ago he was paying $17.95. 

Lumber Prices

 

These price increases push construction costs higher, which lowers profit margins for builders. And that further reduces supply of homes. 

 

So, in a market with massive buyer demand, there is less inventory to buy. But buyers aren't going away in this record-low mortgage rate world. 

 

So the point is...

 

There's a ton of speculation when this market will cool off. I propose the idea that we aren't near that point yet. There's little evidence to support anything beyond what we see today, which is the continuation of a strong real estate market.

 

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I'f you haven't watched my latest Delray Beach real estate market update from January, you can check it out here

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John Wieland

My real estate passion began almost 30 years ago. It was Orange County, California 1989, when my friend and I began a property management business. We focused on apartment buildings in lower social-....

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