Is 2025 the Right Time for Your Project?
copyright: chambersdesign
For years now, construction projects have seen a steep increase in costs. The additional expense came from both materials and labor. I get asked all the time, will we ever see pricing come back down or will we see this trend of higher and higher costs continue in 2025. From my firsthand experience, I can say I’m seeing some good and bad news on the horizon. The good news is that the future might make your home improvement project a bit more affordable.
Before 2024
Back in 2020, the world seemed to fall apart and in the wake of the Mayhew prices escalated like never before. I watched as construction materials, plants and labor skyrocketed. Lumber that had until then never been much of an expense for projects was suddenly 2 or 3x more expensive than only a few weeks prior. Standard items like 2x4s and 2x8s that had gone from $4 to $8/piece were suddenly $30or $45/piece. Plywood jumped from between $50 to $60 a sheet to over $100 per sheet. And that was if you could find them. Many hardware stores didn’t have anything in stock. There were months where some very typical products for exterior renovations like perforated 4” drainage pipe was impossible to find. I remember having to drive all over north Jersey to source one roll. When I did find it, it had doubled or tripled in price. This was the story for everything. All products and materials increased.
On the other side of the story was labor costs. From 2020 to 2021, it seemed like I couldn’t find additional help. This was true for builders, designers and landscapers. Many other companies struggled to find qualified talent for crews. Many companies in the construction industry use recently arrived immigrants for some roles for installation. From what I was told during the last 2 to 3 years is that the steep inflow of immigrants made labor more expensive not less. The new workers were demanding higher rates even though they may not have the skills to accomplish the tasks necessary. A new laborer has to be trained and even after training, they typically take longer to complete tasks. This meant higher costs for longer periods are needed to finish jobs. For example, in the past you might have paid someone $300 to $500 per day for a job that takes 3 to 4 days to finish. Your cost was between $900 and $1200. New employees wanted between $600 to $800 per day and required between 8 to 10 days to finish the same level of project. This meant a total cost between $4800 to $8000. That’s an extreme change year over year. Plus when you have people that needed more training, you need more supervision onsite, and there’s a cost to that in terms of a foreman’s time on one project site.
AND Now?
But that was then and what about 2025? Are there any signs for costs starting to trend downward? I would say yes from my personal experience. Namely, lumber and materials are starting to look like they are not continuing upward in cost. For standard items like lumber such as 2x4s and plywood - I have seen their prices drop from their highs a couple of years ago. The days of the $50 a piece 2x4 look to be over for now. They are back down to your normal rates. The same can be said about plywood and drainage pipe. A roll of 100ft long perforated drainage pipe is around $130 to $145 today - still more than before the pandemic, but more affordable than 18 months ago. And, perhaps just as important is that it’s very easy to find materials now. The one place I’ve not seen prices start to come down yet is with specialty items - that is, finishing materials like exterior siding, light fixtures, wallpaper and pavers.
Photo Credit: chambersdesign
Work Force Forces
Where materials are starting to go back to normal, labor is a different story. First, and I think in general, it’s very difficult to convince someone to take less money for the same job. And, in the world of design and construction, cheaper never gets the results clients really want. For the type of work that I do, details matter more than anything. The right details can only be accomplished with the right people, and the right people will command higher wages. Yet, the silver lining is that after more than 24 to 36 months, where it might have taken someone 8 to 10 days to finish a project, now it is back down to 3 to 4…and sometimes 2 to 3. The difference in cost in completing tasks in half or a third of the time is dramatic. The additional costs for management onsite has greatly dissipated too. A construction administrator could have expected to spend 3 to 4 hours a day at a project in 2022. Now, that same guy should expect to spend 3 to 4 hours a week on site.
Is 2025 the Year to Start Your Project?
Things are looking good for people that have been waiting in the wings for prices to drop to get that new addition to their house or to renovate the backyard. From what I’m seeing, the cost of residential projects does seem set to be less expensive in the coming months. I’m not sure we will see pre-2020 costs, but at least, the inflated price tag has normalized a bit. Residential projects are often expensive no matter when you start them. It always pays to have a strong plan and a quality team to get going. For major projects, you can’t snap your fingers and get a project going. You need some preparation to guarantee a smooth experience. That said, if everybody starts pulling the trigger around the same time - you could find yourself waiting several months if you don’t start fast enough. It does seem like there’s a large group of people that have been patient about getting started.