The supply-chain interruptions related to the COVID-19 pandemic have put negative pressure on an already challenged construction market. Rising construction costs have been a major challenge for developers, but now some are reporting that contractors are so busy that they are declining to bid on new projects.

Michael Boujoulian, managing director of Alliance Residential, is breaking ground on a 314-unit apartment building in Waltham, Massachusetts, and is dealing head on with these challenges. "We have seen hard to believe year-over-year price escalations," he tells GlobeSt.com. "We are seeing a 20% increase in construction costs. We are even having some contractors decline to bid because they are busy enough and they aren't looking to grow. The depth that we rely on in those subcontractor markets has caught up with us. That of course hurts pricing when there is less competition."

There has been strong rent growth in many of these markets. That has been enough to offset some of the pricing problems, but it's been a lot less helpful than you'd think, according to Boujoulian.