Should I wait until 2023 to build an ADU?

[John Anderson]

Hi all,

Looking to build an ADU behind a single family house in the South Bay.  I had a bunch of GCs provide quotes back when money was free in 2021 and lumber prices were through the roof. Decided to pull back because of these variables, but now that interest rates have been raised aggressively I would assume demand has now cooled and that homeowners have a little more negotiating power.

I'm sitting on cash at the moment, so the interest rate environment doesn't impact my decision making. However, would be curious to hear any other data points/predictions about costs in the upcoming year. Any and all guidance would be greatly appreciated!

[Chen Zhou]

I'd argue there's no better time to build than in a recession. Contractors are aggressively looking for work now as the demand dries up. Material prices are also dropping quite dramatically (lumber, cabinets, flooring, tiles, etc.). A few months ago, no contractor is willing to go below $300/sqft in the bay area, now you can probably find plenty.