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Feinmann, Inc.

Feinmann, Inc.

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Will Construction Costs Go Down in 2023?

April 1, 2023

With production costs skyrocketing over the past year, many people anxiously await construction market trends. The question ”will construction costs go down in 2023?” is one we hear more and more. Past trends have indicated differences in pricing from design to production. However, past data isn’t holding up to market trends. Although we have yet to learn all the information, let’s dive into current construction costs and provide more context to help you make the best decision.


Why Are Construction Costs So High Right Now?

According to The Boston Globe, construction projects of all sizes and types are significantly more expensive to build now than in previous years. Factors contributing to higher construction costs include a rapid rise in federal interest rates, an unstable global economy, and expensive shipping and production delays. Furthermore, supply chains are still experiencing disruptions after the pandemic, tacking on months to construction projects’ timelines. Homebuilders and home renovators are understandably unsettled, resulting in scaling back construction projects or calling them off altogether.

Will construction costs go down in 2023? Ben Johnston, chief operating officer at Kapitus, provides some valuable insights:

Rising interest rates will create challenging conditions for construction in 2023. But we do expect continued demand for home renovations as housing purchases decline, as consumers with fixed low-interest rate mortgages look to improve what they own versus trading up. We expect the overall cost of home renovations to stabilize during 2023, as the economy slows and inflation moderates.

If you are in the design phase for a new home and worried about 2023 construction costs, remember that the market may stabilize this year. Furthermore, some larger projects may continue until next winter or even run into 2024 – when construction costs may stabilize.


Factors Affecting Renovation and Construction Costs

If you are worried about renovation and construction costs, remember that your situation will be based on individualized factors.

Some of the main considerations include:

Size of the property

The bigger the property, the more time and money you must invest in construction costs. Bear this in mind if you’re looking to build or extend a property.

Age and condition of the property

If you are planning a home renovation, consider the age and condition of the property. Construction costs will inevitably be far more expensive in old properties that require significant upgrades.

Complexity of renovation

Of course, you must also consider how complex your renovation or building process will be.

Quality of materials, fixtures, and finishings

What is the level of quality you require for your building or renovation? With expensive construction costs surging, you may need to cut back on your wishlist.

Decoration

Another essential element in your renovation or building process is decorating—factor decoration expenses into your budget to avoid disappointment.

Where you live

Location is a significant budget factor to consider, particularly when you are building a home. If you are still trying to decide where to live, consider making a price comparison on which area to choose for the optimal price point and access to amenities.


Construction Costs to Consider

When building a new home, you should also consider your construction costs from project start to end. To summarize, various project phases will include:

Pre-construction build phase

This phase includes site survey, demolition, clearance, utilities, and services. Estimated costs vary depending on factors such as the location and size of the property.

Substructure

This includes foundations, drains, slab bases, and insulation.

Superstructure

This phase includes internal and external walls, roof, insulation, and floors. With internal fittings and finishings, the superstructure is one of the most expensive features of your house-build project.

External structure

Considerations in this phase include doors and glazing, roof tiles, gutters, and downpipe cladding.

Internal fittings and finishes

Internal fittings and finishes include electrics, plumbing, heating, painting and decorating, and flooring. These aspects can quickly spiral in price, so being particularly careful of budgeting is essential.


Project Scope Creep

Scope creep can have a more significant impact on construction costs than inflation. Economic trends may be hard to predict, but a design-build firm can keep its project scope in check and communicate well with clients. That’s why taking charge of what you can control in uncertain times is essential. A great design and construction team will define project boundaries, leading to expected timelines and costs.

Many firms fail to clearly define project scope, leaving both the contractor and client in a gray area once construction begins. Often, the client is unaware that requests for additional features or upgrades will increase costs, resulting in up to 50% budget growth when compounded with inflation. This demonstrates the importance of comprehensive project planning and communication to avoid confusion and unexpected expenses.


Conclusion

We hope this blog has helped you find answers to the burning question: will construction costs go down in 2023? Despite market unpredictability and economic uncertainty, there are some positive predictions of lowered costs in the later stage of 2023 and into 2024. If you are in the design phase, it may be worth holding tight and seeing your project through. If you are seeking expert help with your renovation, contact our award-winning design-build team. We’re just a phone call away and would love to learn more about how we can help you achieve your dream home!

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We loved having entire Feinmann team in our home and appreciated them treating it like it was their own. The work they did is all over-the-top gorgeous. They coached us to select products and finishes that will last a lifetime (and through our toddler), and the craftsmanship with which it was all executed certainly will hold up to time. I admire daily the integration of existing and new, and regret only that in time I’ll likely forget which is which. Feinmann is masterful at what they do. I really can’t say enough nice things about them, and their work.

- Cambridge, MA

From start to finish of the project our ideas were heard and creatively addressed. The quality of the final results are even better than we imagined. Our home feels completely new and we love the improved living space! As far as the team, they are fantastic, personable, timely, has great ideas and always seem to stay calm and in charge, ready to problem solve. The carpenters are a delight to work with and the quality of their carpentry and building skills are impressive, always smiling and offering a “can do” attitude.

- Leveling Up for Grand Entertaining

Feinmann is a top-notch company in every category! We have worked with them on three separate occasions: a complete kitchen remodel (2017), three bathrooms (2016), and a room addition (2011). Working with the Feinmann team was truly a great pleasure! Everyone in the company is committed to quality work, the projects were run proficiently and professionally, they provided the highest quality workmanship, and we always received timely responses to our questions and concerns. My wife and I would consider no-one else for our new project!

- European, Contemporary Kitchen Remodel

We are very happy with the experience we had with Feinmann in what was a pretty extensive remodel. First of all, their design team truly developed a great vision for the house, beyond what we had imagined. Through the remodel, which by its nature is an arduous process (living without a kitchen for a while), the Feinmann team was very collaborative and supportive, managed well and the results have truly transformed our house. We’re extremely happy with the outcome.

- Hosting Haven Meets Artistic Angles

Feinmann took a real interest in building a kitchen that would fit the design of the house and meet our needs. That was when we knew that they were the best choice for us. Anyone can rip out a kitchen and put in some new counters and cabinets, but we wanted someone who cared about design, style, and function.

- White, Waves and Blue Kitchen

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