Newsletters

May 12, 2022

Clients & Partners 

This is the third of our regular updates that we will be sending out as a company to address the current residential construction environment that we find ourselves in. Our goal in this newsletter is to provide our clients with the latest information related to trends we are seeing in our industry, and what to expect related to that during the construction process. 
 
Link to previous updates here: https://renaudinbuilders.com/industry-news
 
New Accounting Manager Introduction: We are excited about the addition of Becca Becnel to our team. Becca has a strong background in accounting and finance and was most recently a senior auditor at Briggs & Veselka. Becca is bringing much needed and added cost control to all of our projects and we know that our clients will really enjoy working with her. You will be meeting her and hearing from Becca in the coming weeks!
 
Trends: Here are a few bullets points related to the trends we are currently seeing and experiencing:
  • Inflationary environment is continuing but at a declined rate. Most of what we are hearing now is related to gas and delivery prices that are driving the costs 
  • Lumber Prices: Lumber peaked in the 2Q and now is holding steady in the 900-1,000 $/mbf range. We will start start to see prices come down here as suppliers cycle through their more expensive inventory
  • Foundations: Concrete, steel and other material related to slabs are still going through slight increases, with the increases in concrete being driven by higher gas prices
  • Material Shortages: We are still seeing unpredictable shortages in material, particularly around framing. While these delays are typically manageable, we are keeping a close eye on them and staying in contact with our suppliers to source from various companies or provide alternative materials to our clients. The large shortages we are seeing right now are in hardie products (used on the exterior of many of our homes), and flooring products, as many of the flooring materials come from eastern Europe and Russia
  • Discussions with Real Estate Agents: In conversations with real estate agents in our areas of focus, we are hearing that existing home prices are also increasing due to the high replacement costs associated with current construction cost inflation. Initially I was not seeing that, but it is now coming to fruition in highly desirable areas of Houston
  • Additional excerpts from articles related to these trends:
What we need from you:
  • Quick and clear decision making to assist in keeping the home moving
  • Flexibility on move in dates while we work with subcontractors to finish work (of high quality) and with suppliers to receive all selections and get them installed
What we are doing:
 
Although the current high activity levels coupled with the unpredictable COVID/Russian War impacts on suppliers and subcontractors present their challenges, we are taking important steps on a regular basis to tweak our process in order to mitigate these impacts on our builds to the best of our ability. We are focused on what we can control: strong communication, driving early selections from clients and designers, procuring items as early as possible, installing on site storage, and giving larger budget contingencies to allow for price inflation. We are fighting to keep our jobs moving forward, and to give our clients the best experience possible.
 
In summary, we are aligned with our clients in completing our homes as quickly as possible as it weighs on the efficiency of our bottom line. We are excited for the new year and feel well equipped to handle all of the turbulence in the market to continue to deliver on our passion of building our client’s dream homes with the utmost quality of workmanship and process!
 
Please reach out with any questions. 
 
Sincerely,
Tyler Renaudin 

 

January 5, 2022

Clients & Partners

 
This is the second of our regular update that we will be sending out as a company to address the current rapidly changing residential construction environment that we find ourselves in. Our goal in this newsletter is to provide our clients with the latest information related to trends we are seeing in our industry, and what to expect related to that during the construction process. 
 
Link to previous updates here: https://renaudinbuilders.com/industry-news
 
In this update, we will be pulling from a recent podcast that is produced in Austin by a builder there named Matt Risinger. Matt is someone that has a very strong voice in our industry and we have a lot of respect for him and what he stands for. If you have any interest in listening to his podcast in its entirety we have linked to it here (30 min): Episode 30: How the Supply Chain Challenges Are Affecting Building Pros
 
Trends: Here are a few bullets points related to the trends we are currently seeing and experiencing:
  • Inflationary environment continues across the board with many supplier driven price increases being passed on to us. We receive notices of price increases periodically, and we are currently seeing this in flooring, drywall, paint, windows, roofing, insulation, and many more items.
  • Lumber Prices: We thought this was behind us, but lumber is on the rise again primarily driven by weather issues impacting saw mills and the U.S. decision to double tariffs on Canadian softwood lumber. If we get some softening in demand due to interest rates and production builder slow downs then we will see this come down in 1Q and 2Q of 2022
  • Foundations: Our concrete contractor is seeing slight price increases in labor, concrete and void boxes (used in structural slabs), as well as larger increases in steel rebar.
  • Material Shortages: We are still seeing unpredictable shortages in material, particularly around framing and hardware. While these delays are typically manageable, we are keeping a close eye on them and staying in contact with our suppliers to source from various companies or provide alternative materials to our clients.
  • Labor constraints: Labor constraints have been the most impactful and challenging part of construction over the last year. Subcontractors that we have long standing relationships with and we are one of their “A” builders are busier than normal, they have more work than they have had in the past.
    • In the past we haven’t had to wait as long for people to show up on our jobs and sometimes when they do show up, they have partial crews for a week or two until they can supply the full crew.
    • Additionally, when subs are scheduled, they show up with missing pieces or parts and those could be back ordered, and it may be a situation where we can’t move forward until those come in. 
  • Omicron: We anticipate there to be some effect of the recent outbreak in Omicron as it relates to our supply chain of materials and items that are produced in factories relying upon manpower. We are already experiencing our crews being affected by this.
What we need from you:
  • Quick and clear decision making to assist in keeping the home moving
  • Flexibility on move in dates while we work with subcontractors to finish work (of high quality) and with suppliers to receive all selections and get them installed
What we are doing:
 

Although the current high activity levels coupled with the unpredictable COVID impacts on suppliers and subcontractors present their challenges, we are taking important steps on a regular basis to tweak our process in order to mitigate these impacts on our builds to the best of our ability. We are focused on what we can control: strong communication, driving early selections from clients and designers, procuring items as early as possible, installing on site storage, and giving larger budget contingencies to allow for price inflation. We are fighting to keep our jobs moving forward, and to give our clients the best experience possible.

 
In summary, We are aligned with our clients in completing our homes as quickly as possible as it weighs on the efficiency of our bottom line. We are excited for the new year and feel well equipped to handle all of the turbulence in the market to continue to deliver on our passion of building our client’s dream homes with the utmost quality of workmanship and process!
 
Please reach out with any questions. 
 
Sincerely,
Tyler Renaudin
 
 

October 4, 2021

Clients & Partners,
 
This is the first of a regular update that we will be sending out as a company to address the rapidly changing residential construction environment that we find ourselves in. Our goal in this newsletter is to provide our clients with the latest information related to trends we are seeing in our industry, and what to expect related to that during the construction process. 

 
Although the current high activity levels coupled with the unpredictable COVID impacts on suppliers and subcontractors present their challenges, we are taking important steps on a regular basis to tweak our process in order to mitigate these impacts on our builds.
 
Drivers:
  • Activity is way up: ‘New home construction starts are up almost 20% from August 2020 to August 2021’
  • COVID: Many suppliers and manufacturers have entire crews or warehouses shut down due to outbreaks making lead times unpredictable
  • A lot of what we continue to learn is anecdotal, but these drivers have affected many other areas of residential construction
What we know now:
  • It started with lumber: “Lumber prices skyrocketed to historic highs during the coronavirus pandemic, fueled by a demand for new homes and a surge in renovations and DIY hobbyist projects by those of us on lockdown”
    • Fortunately, we are starting to see these prices normalize but some wood products are still driving price increases. Ex: Cedar used for fencing, garages, and siding
  • We are not getting great information from suppliers because they do not have good information from manufacturers 
  • Lead times are extending beyond estimated delivery dates
    • As an example, we ordered cabinet door hardware to be delivered in July, only to find out from our supplier that it was backordered until February – 6 months after the closing of the home
  • Material prices are rising for almost every item, including copper (used in electrical wiring), sheetrock, garage doors, paint, insulation, roofing materials, concrete, steel, and more
  • Subcontractors are stretched thin due to activity and often times take longer to complete work than years prior
What we don’t know:
  • What other items will be affected going forward related to lead times and pricing
  • What trade will show up understaffed causing delays in timing
What we are doing to mitigate:
  • Ordering items much earlier: trusses, appliances, tile, lighting
  • Selecting items that are not back ordered to the best of our knowledge
  • Having finish products delivered on site sooner so that we can determine what is missing to replace it before it is time to move in
  • Communicating with our subcontractors in advance of their work starting, and re-arranging our schedules to accommodate slower construction phases due to lack of available workers
  • Communicating with our clients as soon as we see issues to make sure everyone is aware of what is happening
What we need from you:
  • Trust that we are doing everything we can and managing this process on your behalf
  • Understanding that we may have to do things temporarily to keep the house moving forward and this may incur additional costs. Ex: Storage containers, covering and uncovering finished products due to changing sequence of construction, or getting temporary fixtures until the real selection comes in
  • Patience as some of the changes are our of our control
  • Flexibility on move in dates while we work with subcontractors to finish work (of high quality) and with suppliers to receive all selections and get them installed
In summary, we don’t want to cause any anxiety related to the construction process; however, we may be reaching out to push some selections forward in the process to try to keep delays to a minimum. These are uncertain times, but we are confident in our team and our ability to keep the process organized and enjoyable for you and your family!
 
Aly will be following up with you as needed to inquire about adding a storage container at your property in order to receive materials well in advance of when they are needed. 
 
Please reach out with any questions. 
 
Sincerely,
Tyler Renaudin
 
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