“How expensive?” tracks measurements of California’s totally unaffordable housing market.
The pain: The cost of fixing or remodeling your home in California has risen by 67% in a decade – twice overall inflation’s jump.
The source: My trusty spreadsheet reviewed Verisk’s repair cost index, which tracks the cost of 31 groups of items used in home repairs including appliances, doors, framing, plumbing and windows – plus their installation.. The surging expenses nudged up costs for homeowners, landlords, builders and insurers.
The pinch
Consider that these building projects that cost a typical Californian $10,000 at the start of 2013 now run $16,703.
But the upswing has sped up since coronavirus upended the economy, disrupted supply chains, and increased interest in homeownership and remodeling.
- REAL ESTATE NEWSLETTER: Get our free ‘Home Stretch’ by email. SUBSCRIBE HERE!
Supply and labor costs grew 5.8% in the past year. And that’s good news. Expenses surged at an 8.7% annual rate during the previous three years.
Then contrast those leaps vs. how these expenses grew in pre-pandemic 2013-19 – only 3%-a-year average increases.
This isn’t some California quirk. Nationally, what cost $10,000 for these items in 2013 is now a $16,401 bill – or a 64% jump.
The US price swings are similar, too: Up 6.6% in the past year vs. 8.4% increases the previous 3 years vs. 2.7% bumps in 2013-19.
Pressure points
These construction price hikes roughly double overall inflation.
Consider upswings in the US Consumer Price Index. It shows all goods and services that cost $10,000 at the start of 2013 are now $13,298 – or a 33% jump.
The CPI rose 3.7% in the past year vs. an average 5% annual jump over the previous 3 years vs. a 1.6% annualized gain in 2013-19.
Quotable
Costs “jumped after the COVID-19 pandemic, and haven’t slowed down much after that initial burst in 2021,” said Greg Pyne, a vice president at Verisk. “Hopefully, as the rate of inflation continues to decline and supply chain disruptions are minimized, repair and remodeling cost increases will follow suit.”
Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com
