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I attended the Remodeler’s Show in Detroit a couple of weeks ago and had the opportunity to listen to a speaker that claims that, “the cycle time 4 years ago on the average house was 130 days, and that the cycle time has gone to 224 days today”! He didn’t go into detail as to what has caused this increase, but personally I am seeing it in the form of the labor shortage and unavailable materials. It has significantly hit home on the recent house we are doing.
We still have the same overhead costs and with the increased cycle time, less opportunity to amortize them across a client base. We will certainly have to raise our prices but, do we raise our construction prices by 60% to cover the increased time factor? Are others of you seeing some of these effects? How are you dealing with them?
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I attended the Remodeler's Show in Detroit a couple of weeks ago and had the opportunity to listen to a speaker that claims that, "the cycle time 4 years ago on the average house was 130 days, and that the cycle time has gone to 224 days today"! He didn't go into detail as to what has caused this increase, but personally I am seeing it in the form of the labor shortage and unavailable materials. It has significantly hit home on the recent house we are doing.
We still have the same overhead costs and with the increased cycle time, less opportunity to amortize them across a client base. We will certainly have to raise our prices but, do we raise our construction prices by 60% to cover the increased time factor? Are others of you seeing some of these effects? How are you dealing with them?