Construction Costs Trends in Chicago - June 2022

[Frank S.]

Hi BP Heads,

I have a duplex down, kitchen, bath,  and garage project in mind in the north area ( I had been postponing for a few years) and kitchen/bath, aesthetics renovation in Little Village.

Have the construction costs cooled a bit based on the increased rates or is this still too early to notice?  I recall wood, and everything else, was very pricey last year.  Contractors were super busy - hence, higher rates.    E.g., I had a 30/hr carpenter that is now asking 60/hr. He is not worth 60/hr.

I received a few leads for architects and contractors, and I am open for more leads, but constructions costs are making me scratch my head.  

What does your crystal ball tell you about Chicago costs?

Thanks, 

Frank

[Jonathan Klemm]

Hey @Frank S. - I'd say in general construction materials have risen with inflation and will unlikely come back down.  However, those crazy lumber prices have leveled back out and those were more so due to supply chain issues than inflation which makes sense why it has come back down and fallen in line with our standard inflation.

We are still seeing long lead times for items such as windows, doors, and some tile.  Finding a QUALITY carpenter for $30/hr doesn't seem likely, we usually figure about $50/hr minimum and the best are around $65-$75/hr.

As far as architects go if you haven't connected with @Prashanth Mahakali or @Samuel Pavlovcik they are both great Chicago architects.

My crystal ball feels a slowdown, but data-driven investors will still be able to find deals and real estate will continue to strive with low inventory as the rest of the economy continues to slow down slower and slower.