An analysis of the latest Economic Census data by NAHB economist Natalia Siniavskaia shows that, on average, residential construction establishments were able to cover their hard and soft construction costs and generate positive profits in 2012.
The 2012 data show that the direct costs of construction – consisting of construction payroll, costs of construction work subcontracted out to others, and costs for materials/supplies – vary from 65% of total revenue of specialty trade contractors to 87% of the business receipts of multifamily general contractors without land costs. For single-family general contractors (who build on land customers own), the direct costs of construction consume on average 81% of the total revenue.
For single-family general contractors, 7% of total business receipts go to pay wages of construction workers. Specialty trade contractors, who maintain larger construction payrolls and subcontract out a minimum amount of work, spend on average 19% of total revenue on construction payroll.
In sharp contrast, multifamily general contractors who subcontract out most of the work, spend only 3% on the construction payroll. Their biggest expenditure is the cost of construction work subcontracted out to others, 63% of the total revenue. This far exceeds the typical spending by single-family general contractors on subcontractors, which amounts to 36% of outlays.
According to Builder magazine, new home sales were 13.1 percent of total home sales in October 2013, up slightly from 12.8 percent in September 2012. While up, new homes as a percentage of total sales is significantly lower than other markets like Charlotte and Columbia, where the new home sales market share is closer to 20 percent.
Did you know: 21 percent of all new housing is infill development?
According to David Crowe, PhD., NAHB Chief Economist, material prices in a typical new home have increased five percent in the last six months. In addition, he says prices are up even more in the South and Southwest than the rest of the country.
Crowe reports that the increase in materials costs equates to an $8,500 increase in the cost of a new home. He said builders report increases in framing lumber, OSB, plywood, gypsum, trusses, ready-mix concrete, roofing materials, and cement.
Crowe said the information is the result of a survey of HBA members conducted by NAHB.
Read the complete report at builderonline.com by clicking here. Builderonline is the website for Builder, a magazine that each HBA member receives as a benefit of membership in the Home Builders Association.
According to Builder magazine, new home sales continued to rise, but the pace of growth is slowing a bit. According to Builder’s data, new home sales grew 21.3 percent in October, compared to the same month in 2010. That growth follows a 48.6 percent increase the month before.
New home sales made up 15.7 percent of all home sales in October, up 12.5 percent in October 2010.
You can review Builder’s report for Greenville at builderonline.com by clicking here.