The price of building materials in Florida seems to finally show signs of slowing down, albeit in an uptrend. After two years of significant volatility, due to the imbalance in the production chain. It is still too early to know if the segment is entering an equilibrium phase. High prices of construction material directly impact the average price of real estate. New condos tend to pass the high costs on to buyers and, as a result, pull prices across the entire market.
Although the building materials price index fell 2% from June to July this year, according to data from Associated Builders and Contractors, prices in general are still higher than they were before the pandemic, with steel-based products. and wood representing the largest increases.
Just as an example, the prices of rolled steel bars increased by almost 30% from June to July this year. The increase is even more expressive compared to the same period last year, almost 84%.
The increase and also volatility in the prices of construction materials lead to budget unpredictability, creating insecurity in the construction sector.
Majority of construction companies “blow budget”
Most developers in Florida have gone over budget on their new ventures. This cost will certainly be passed on to the final buyer, greatly impacting the average property price in Florida.
The high cost of building materials is a strong indication that Florida real estate prices will remain high. Other factors contribute to this forecast, such as the still strong demand for real estate in the region, inflation and low inventory of homes available for sale.
The high potential for appreciation reveals a great opportunity for investment at this time.
About AMG International Realty
AMG International Realty is a global luxury real estate company specialized in Florida . If you want to know more about the opportunities in the real estate market in Miami, Orlando or Tampa Bay, contact me right now and chat with me via WhatsApp: +1 305 318 6968 (Heloisa Arazi).