Aren’t Construction Costs Supposed To Be Falling By Now?
Construction costs have been rising in Houston for a few years now. McCord Development president Ryan McCord says the contractors he works with claim construction prices will go down by 10% by the end of the year. So far, that hasn’t happened. Bisnow spoke with Ryan to find out why costs remain so high. Don’t miss your chance to hear more from him at Bisnow’s 5th Annual New Construction & Development Event on Sept. 15.
New development may be slowing down, but the city is still full of construction sites. Ryan (left, with colleague John Flournoy) says until projects start topping out, cost won’t come down. With crews occupied, it’s hard to find contractors for low prices, especially skilled laborers. Without the right amount of skilled labor, a project's timeline has to be extended, dramatically increasing cost.
Ryan pointed out an important factor: Contractors are increasingly mobile; they follow the money. It’s never been easier to get a crew from one city to another, especially in a state like Texas. With development happening all over Texas, particularly in Dallas, the labor market has never been more competitive. While the competition is driving up prices, it’s also showing positive signs. Ryan has seen an increase in the number of bidders on projects. To Ryan, that’s the first step towards construction cost decrease. When you go from two contractors to 10, undercutting estimates is bound to happen.
Hear from Ryan and the rest of Bisnow’s panel of experts at Bisnow’s 5th Annual New Construction & Development event. Register today and we'll see you Sept. 15!