Anirban Basu, chief economist of Associated Builders and Contractors, said he expects prices nationally to stabilize eventually, though the near-term effects of higher prices could dampen the recovery of the new-home market.
“I think it will slow the housing recovery, because new-home buyers are very price-conscious,” Basu said. “What builders might do is move their product to be more upscale; affluent buyers are more likely to spend 5 (percent) to 10 percent more to get what they want. Value-oriented buyers are more likely to purchase an existing home.”
Greg Hardwick, president of Hardwick General Contracting Inc. in Maitland, Fla., said a lack of skilled labor also will affect the new-home market in 2013.
“The thing that may get us next year is the labor. There is a huge theme throughout the industry that not enough masons, drywallers and framers are available to meet demands,” Hardwick said. “We've lost a lot of that labor and those resources. They've gone to different industries, and now the demand is going back up.”
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