This month lumber prices increased 20% to $650 per thousand board, according to data from Random Lengths. This has been an ongoing story since the start of the pandemic and has contributed to an increase in new single-family home prices and apartment prices by approximately $14,000 and $5,000, respectively, according to the National Association of Home Builders. 

Yet overall construction pricing may remain muted, despite the rise in costs which also includes new safety measures. The reason: Contractors are becoming more aggressive with their pricing and reducing their profit to continue to win work, according to CBRE.  This reduction coupled with a rise in general conditions nets a slight decrease in construction costs from the previous year, it says.

While construction costs might be going down, COVID-19 is causing site constraints that harm contractors' productivity. CBRE lists limited vertical transportation, staggered shifts and general health and safety checks each day as the productivity issues caused by COVID.

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Leslie Shaver

Les Shaver has been covering commercial and residential real estate for almost 20 years. His work has appeared in Multifamily Executive, Builder, units, Arlington Magazine in addition to and Real Estate Forum.