EP #10: New Construction

Today's unprecedented market is opening things up to new challenges. One of them being the shortage of actual homes for sale. The result is an ever growing demand for new construction. But don't be fooled! There are challenges and shortages that still occur; listen in as Rick explains how you can help protect yourself if you're looking at building a new home.

To learn more:
https://collierhomeinspector.com/

Trade Secrets Inspections
Rick Kooyman
rick@TradeSecretsInspections.com
(239) 537-1186

Transcript

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Charlie  

Welcome to the Trade Secrets Inspections podcast, because “You need to know!”. Here's your host, Rick. 

Hey, welcome back to the Trade Secrets Inspections podcast. I'm back Charlie McDermott here with Rick. Rick, how you doing?

Rick 

Excellent. Great to be with you again, Charlie, looking forward to a new lively conversation.

Charlie

As always, as always said today, we're gonna delve into the new construction market. At least you teased me a little bit. And I've heard some interesting things. I mean, the whole just building experience has completely changed, I guess, because of the, you know, whether it's inflation or shortage of products, and you know, we just start building a home today, and God knows what it really costs months down the road here. So yeah, there's a lot happening. Yeah, yeah. So take it away, Rick, fill us in! 

Rick

Yeah, well, let's just start with kind of what's going on today. I mean, like, as there's, as we see that, you know, there's lots of people in town, it's that time of year. But generally, in the real estate market today, What's odd is that there's a serious shortage of houses for sale. Essentially, there's, there's just not that many listings out there. There's far more people coming in looking to buy than there is anywhere near the availability for them to buy, which is driving prices up, obviously. But just a statistics from the real estate market is the number of listings this year compared to last year are down, we're at 1/10. Of what was generally on the market. There is virtually nothing to buy, essentially, I mean, it's crazy. And what that's doing is pushing people towards the new construction market. So I wanted to talk about that a little bit today. 

But you know, before we get to that,...

...you know, just think about these numbers a little bit. Collier county, we have just about 400,000 people in Collier County as of 2020. And Lee county, we have over 800,000 people in Lee County. So just between Lee and Collier, we're over a million people. Right. And that's growing every year, of course, and it actually is growing fairly steadily. I mean, it's not like there's this huge spike of people, all of a sudden coming down here. I mean, if you look at the numbers, they're pretty consistent growth numbers. In our county, we see about 7000 new residents a year. As far as permits go, the county permitting office is doing about 5000 permits a month right now,

Charlie

For new construction?

Rick

...for new construction or remodel. So yeah, residential building purposes on an average month in Collier County, but you know, it's half the size of Lee County, they're doing on average 5000 permits a month now, there's, you know, less than 50 inspectors that work there. So you get this really matter where the time goes, but just you know, 

to bring it to the construction side of things, 

you know, the, the builders side of it is also a struggle, like you mentioned on on various things, supply lines, one of the bigger problems we're actually having is, is skilled trades. Yeah, actual people to do the work when we can get the materials. There's just not enough skilled labor out there. There, there are people willing to work, but they don't have the skill level yet. Or there's not the same pride in workmanship anymore. So there's various reasons why third party inspections can help you in new construction. Obviously, I'm here to tell you how we can service that new market.

But you know, a typical new new home build is going to it six to nine months is what the builders average is looking to be. Like he said right now it's kind of random. It's more like nine to 12 months. I talked to some of my contacts last week. We're currently about eight weeks behind on block delivery, and about 16 weeks behind on doors and windows, you know, so and then you add the scheduling changes to the shortage of trades that you can get scheduled and change the scheduling around with that short supply. And you can just see how it all just kind of falls apart. I mean, one can't match the other one at the same rate and you end up with a whole bunch of people being upset and the the trade workers is forced, you know, to do whatever they can do to get the job done, essentially, or meet their obligation.

So unfortunately, you're getting a lot of people sent out there to do work that they may not be trained yet to do. I've been sent some crazy pictures of stuff that, you know, the builders have come in and seen that, you know, has been installed. And just like, You can't be serious, you know, that's, and fortunately, some of those things were caught by the county. But you know, the county is so overwhelmed that you can't count on them to police, the industry like that, that's just not what they're there for. Builders gonna keep up with the process as much as they can, but to the same extent that they're under the gun of the contract, and they're under pressure from the customer. To finish the product, they're going to let things slide to whether it's knowingly or unknowingly, which is more the case than the former, you know, it's generally it happens unknowingly, and gets overlooked and covered up and then down the road, you're in the home. Hopefully, within the first year, you notice it, well, you have your warranty, and you can get it corrected.

But oftentimes, it's not the case, you know, it's three, four or five years down the road, when an inspector comes along, like myself for whatever reason, insurance or whatnot. And something fundamental gets pointed out to him at that point. And now, now, it's a very difficult situation. So we just want to get the word out there to all those people that are coming down here hoping to buy a home, and are finding that there isn't a home to buy right now. But there's certainly builders out there willing to sell them, a new property that doesn't exist yet. is very much in their interest to have someone other than the county look out for them. And in that regard, we offer what's called phase inspections, we offer several different construction inspections. So depending on what kind of oversight you want, we can do anything from a final inspection only to a full phase one, two and three inspection. So we'll come out and see the site prep and the slab pour will come out and see the shell when the house is dried in as we call it. So you have the exterior, the roof and the doors and windows and, and you're not going to the interiors yet to be done. So you know, we come and check and make sure that we're all on the same page, and everything's coming along. And we're not getting those oversights occurring.

Often what I tell people, by their, you know, what they really, really need to have done. And unfortunately, many of the builders try to get us out of the mix, because they're trying to just move on to the next thing. Basically, they don't want to come back or have someone point out all the problems right away, and timeline. But you know, I say to people listen, before you sign that final COC contract, when you do your walkthrough, you want to do what you want that walkthrough to have a final inspection with it. So ideally, you should be doing your walkthrough with an inspection report in your hand. And then those things can all get addressed. And at the final signing, we can do a final inspection and make sure that everything is correct. And then you move into a home that you're confident in. And then you still have your 12 month warranty to you know, test drive everything, make sure everything's working.

And on that topic of the 12 month, 

which is your average builder's warranty, you know, they're going to give you a 12 month warranty on a home at 11 months, please call an inspection company to know, in and out that what you bought is what you want, and it's all functioning properly, before your warranty period is up. And even if it doesn't get corrected before that period is up. If we can get it documented that it existed under the warranty period, then then we're okay and you can if it takes over the next year to get it fixed. That's what it takes. But it's still covered under the warranty period. You see, if you find out 13, 14 months after you moved in. It's your problem now. Yeah. So spending $500 to find out that you have you know a $10,000 problem.

Charlie  

Yeah, that's it's a it's huge. And like you said, peace of mind you You know, oh, my goodness, you know, as you're going through all that brought back memories of our first home that we had built. And I remember going out to the site, and this is back in the early 90s. Before, I mean, Home Inspection really wasn't a thing back then. And, you know, looking at the foundation that was poured and putting the basement in the framing, but I had no clue. They could have been using toothpicks instead of two by fours. I'm not sure I would have figured that out, you know? My goodness, you know, it, there are so many little things that can happen, you know, before the drywall was put up, and, you know, whatever. Why wouldn't you bring someone in with that kind of expertise and experience?

You know, the other challenge, I ran into the guy that built my home back then, I went to high school with, and so there's that kind of icky and, and so, so this is the crazy part. I mean, you talk about a punch list and stuff, and, and I just felt bad, you know, hey, the house is done. I don't want to call him over. I mean, Rick, literally, we had, like a section of our ceiling in two different parts of the house that that just had the primer paint, they never put the finish coat on. And I'm like, oh, you know, I'll take care of what, whether you have relationship with the builder or not, it takes it removes all that awkwardness, It's like,  I'm not a professional, I hired Rick to to make sure that we're all protected.

Rick

Absolutely  And that's okay, you can blame me, I don't mind. I'm here to be that guy for you. I'm here to you know, be the guy that comes out and looks at it and all those different stages and knows what I'm looking at. So, yeah, it's absolutely true. I mean, it's an intricate process. And when you come out there as the lay person, you're gonna be overwhelmed with what you're looking at. And you can be told everything is great. And even if you think it's wrong, you just don't know enough to stand up for yourself, essentially. So yeah, we're here to help.

 Charlie

Yeah. And I think the worst case scenario is is time to sell 10, 15 20 years down the road. And yeah, that inspector finds an issue that was never uncovered, right?

Charlie  

Surprise!

Rick 

Often in that situation

Yeah, they're like, but how did this ever happen? And well, this is how it happens. It's it's one little step on top of another that doesn't get looked after. And then here we are.

Oh, very insightful record. Really appreciate you. You're covering that topic. And yeah, we'll reconvene.

Awesome. You too. It's great talking with you again, Charlie.

Charlie  

Thanks for listening to the Trade Secrets Inspections podcast. To learn more about Trade Secrets Inspections, go to www.TradeSecretsInspections.com or call 239-537-1186.

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