The problems with new home construction are laid bare in a recent industry study. It’s not pretty; a 4 year study by LJP Construction Services analyzed more than 2000 projects and what they found is a major concern. In fact, it should flash bright caution lights in every new home buyer’s face. It’s unlikely, as most new home buyers fail to fully understand the process and how to identify issues. The “real world” connection here is that we just finalized termination of a new custom home build (600K) for clients we represent. This was a first for us but the horror show quality and builder push back left us no option (yes, it will be a future post).
Problems With New Home Construction
The study found several concerning residential construction issues across the United States. The most significant deficiency types include exterior weather barriers, structural (wood) framing, mechanical, electrical and plumbing systems and window/door installations. Poor workmanship, misinterpretation of plan details and deviations from manufacturers’ recommendations are among the top culprits causing construction deficiencies.
The root of the problem, or at least one of the major roots, is a lack of skilled labor. Everything revolves around skilled labor, but as noted by the Federal Reserve, “The ratio of job vacancies to unemployment in the construction industry – a measure of labor market strength – shot up to historic highs at the end of 2018, and it has remained near those levels. These indicators confirm what is heard from construction industry employers around the country – it’s extremely difficult to find and hire workers, skilled or otherwise.”
How to Avoid/Control Problems with New Home Construction
The issues noted in the industry study are alarming. The idea that “it’s inspected by the county/city” holds no water; these inspections are not at all thorough or significant. There are two key things every new home buyer can do to help avoid problems with new construction. First and most important is to work with and be represented by an agent experienced with the process of building a home. The agent on site represents only the builder; they are legally contracted to do so. When issues arise, they will forward concerns but will not be an advocate for buyers. The builder pays the buyer agent; NOTHING is kicked back to buyers that don’t have an agent, there are no discounts. Work with an agent that is skilled in new construction contracts, the selections process and most importantly, the building process. There will be issues with every build.
Skilled labor is critically short, many builders are working with subpar labor. This mandates close supervision; something not done by many builders. The results are poor quality, mistakes and in some cases, unsafe homes. It is CRITICAL that every build be closely monitored. Even then, expect excuses and pushback from builders when issues are found.
Having skilled eyes on the build is the seconds critical item, hire an independent home inspector. The “pre-drywall” inspection is a must; at this point the home has major systems installed (plumbing, electrical, HVAC) but drywall is off. The inspector can spend time ensuring that all aspects of the build are in accordance with codes, building standards and or manufacturer guidelines. It is a guarantee that issue will be found; some due to simple misses, some to mistakes and some to indifference. No matter, those missed issues become the buyer’s problem at closing.
A home isn’t built in a controlled environment, no one can contain all of the variables. However, the current state of the home building industry and cautions sounded from within, should raise flags with everyone in the industry along with buyers contemplating a new home. Do not go at it alone, trust nothing, understand that builder contracts are skewed entirely in the builder’s favor, use skilled inspectors and understand that every build will have issues. As has been told to many of our clients, “don’t try to apply logic to an illogical process”.
Give us a call with any questions, the report by LJP Construction Services is here.