By Jeb Breithaupt, B. Arch, MBA

I’ve been in the remodeling and building business since 1983 and I have never seen prices go up like this before. For a single sheet of 4‘x8‘ plywood, three-quarter inch to sell for $60 just absolutely blows my mind! I remember when it was $18.

Recently, a long-time client came to me to do a room addition and some interior remodeling. I designed the project and then started to price it out for them. These are longtime clients who I’ve worked with for 25 years on and off. My estimator and I priced it and we were off by a good 15% over our estimate. Again, we’re still quite blown away by how much things have gone up in the last year and a half. There are some items like steel rebar for foundations or possibly concrete and lumber, that I do think prices will retreat slightly in the coming year.

However, for items that have any amount of engineering put into them, like solid wood flooring, I don’t see prices going down much. My longtime wood flooring supplier and installer who I’ve dealt with since 1989 has seen it go up by 20% or more in the last 18 months. When I asked him whether the price is going to go down, he just laughed and said, “Heck, the suppliers are not going down on their prices!”

I thought it be an interesting exercise for me to go over a room addition remodeling estimate and see what my opinion of where prices are going to go and what inflation in construction will look like for a project of this type. Now bear in mind that this survey of mine is my personal opinion and maybe it took all of 30 minutes for me to do, but I thought it was interesting.

Of the approximately 60 items that are surveyed in my estimate – everything from concrete to steel to cabinets to doorknobs – I believe six items could possibly go down in price in the next 12 months. These were items like steel (which I think will go down a little bit, maybe 15%), drywall (I think it’s a little high and it might go down), and some of the wood/lumber prices I think will moderate.

The next thing I had said to myself was, “Okay, in the next five years what’s going to go up?” And the answer was simple: all 60 items! One of the things that’s glaringly obvious to me because I’m in the industry is how the labor shortage in the construction industry is affecting prices. There just aren’t enough skilled craftsmen to go around. I’m of the retirement age but I’ll keep working a while longer. But one of my best guys is probably three years away from retirement.

Remodeling magazine recently predicted that the speed of price increases will slow down over the next year, possibly slowing below 1.5% by 2023. But even with this rate normalizing, costs are not going to reverse course. Prices are going to continue going up, only more slowly. The price of remodeling in 2022 is still going to be a great deal when compared with the price of remodeling in 2027.

Sorry for old timers like me that are absolutely blown away by $60 plywood. I still believe it’s not going to be cheaper to remodel or to build in one year two years or five years from now. Whether prices will be 5% higher in 2027, 10% higher, or 20% higher I don’t know. But they’ll be higher just the same; it’s just simple economics.

Jeb Breithaupt, B. Arch., MBA, is the president of Re-Bath in Shreveport. You can contact him at 318-216-4525 or by visiting www.rebath.com/location/shreveport.