The short answer is; it depends.
Hurricane Sandy hammered the north east coast last week putting 88 billion worth of homes across eight states at risk according to the Consumer Federation of America. We won’t know the true cost of this storm for months.
According to the National Association of Home Builders Hurricane Sandy will be a positive boost to construction in two ways. First it will boost remodeling as homeowners who sustained damage to their properties, particularly primary residences, hire contractors to make immediate fixes. It is also an opportunity for workers who have survived a very down housing market to get back to work. In the short term it will damped new home construction. Expect it to rebound in early spring to levels slightly higher than before the storm as owners start to finally rebuild those properties.
Conventional wisdom in our industry has always been that large natural disasters always spike lumber and commodity prices. Looking at the lumber prices last Friday, November 2nd sure enough the Framing Lumber Composite (weighted average of 15 key items) is up $10.00 per 1000 board feet over the previous week. I suspect that next week it will be higher. It will bounce around for awhile due to speculators and probably go back to levels a little higher than last week. The trend has been up for the last year and we can expect that upward movement to get stronger next spring as the rebuilding in the east really begins to take off.
What does that mean to our market in Scottsdale? It means that all materials used in construction will continue to have pressure on prices to rise. This is not new; however there will be new stronger demand this spring. Labor has been tight for the last year; it will continue to be a problem and labor prices will rise. One positive event is that the sales tax proposition failed to pass which is a savings of thousands of dollars on every home next year. If you are thinking of building or remodeling; now is the time.