Sims Luxury Builders Blog

Tips for Success in the Age of Volatile Construction Pricing

volatile construction pricing

You’ve probably heard in the news that prices in construction, as in many other industries, are seeing unprecedented inflation and volatility. Recent data from the US Census Bureau showed that construction costs rose by 17.5% year-over-year from 2020 to 2021 – the largest spike in this metric in more than 50 years. Moreover, 2021’s costs were 23.5% higher than 2019’s pre-pandemic costs, showing just how significant the last two years have been in their impact on demand and all layers of material supply chains.

The unpredictability in commodity pricing (lumber, steel, copper, concrete) as well as the continual increases in other goods (appliances, countertops, tile, sheetrock, etc.) are causing quite a bit of frustration and heartburn for homeowners, builders, and trades alike. From global supply chain snags, increasing demand, and labor shortages, to geopolitical strife and environmental setbacks, the factors that have led to this price fluctuation and inflation don’t seem to be going away anytime soon.

So, what does this mean for you and for your future custom home or renovation project? Today’s article shares some tips for success to make it through this age of construction pricing volatility.


As problems with the supply chain continue, experienced custom builders like us have been able to weather this storm with the help of effective planning and longstanding industry relationships.

Establish a trusted relationship with your custom builder as early as possible in your custom home or renovation journey. This will allow your budgetary goals to stay front and center throughout the initial stages of the process (architectural design and pre-construction) as well as during the construction phase of your project. Your custom builder can – and should – be doing pricing exercises and building a preliminary construction budget early on in the process in order to properly guide the design of your custom home or the scope of your renovation. Because builders are so intimately in-tune with pricing trends in their market, they can help you “value-engineer” your plan by advising on alternative materials and methods when a particular material’s prices are currently way too high.

In addition, custom builders with longstanding relationships with subs and vendors are likely to get preferred pricing and timing priority in this labor-squeezed environment. Because subs and vendors know they can count on experienced, high-quality, and well-run builders for future work, they are more willing to avoid panic pricing beyond what current market conditions justify. In addition, builders who have strong relationships with many subs and vendors can rely on them in order to get multiple bids for all major cost categories in your budget, ensuring that you are getting fair pricing for your project.

Curious how to choose the right custom builder for you? Download our free eBook: 12 Questions to Ask When Interviewing Custom Builders.


Your custom builder should be locking in pricing as much as possible and as early as possible. This means it’s in homeowners’ best interest to sign their construction contract and pay their deposit quickly so the builder has the authority to sign on as many subs and vendors as they can. While some trades won’t allow us to lock in pricing until we are ready for delivery, others will. The commitment that a signed proposal provides to a sub/vendor is sometimes enough to allow builders to lock in pricing early. It’s imperative that your builder is organized and proactive enough to vet proposals early, make sure they are accurate and comprehensive, and sign them quickly in order to lock in as much pricing as they can.

In addition, your custom builder should be placing orders for materials that are experiencing major supply chains issues (appliances, windows/doors, HVAC equipment, beams/trusses, etc.) MUCH earlier than they would in normal market conditions. Lack of organization on your builder’s part can set your construction schedule back weeks or months, which will cost them – and more importantly, you – a whole lot of money.  


We know we sound like a broken record on this one. Making selections early is key. The more design selections you make during the architectural design phase, the more exact your plans and specifications will be, the more accurate your initial budget will be, the earlier your builder can lock in pricing and place orders, and the more stress-free your entire experience will be. In addition, with selections made early, your builder can assemble a comprehensive and precise construction budget, which will give you much-needed certainty and security in your financial investment.

Want to know which design selections to make first during your custom homebuilding journey? Read this article on our blog.


In this time of unprecedented and unpredictable price volatility, be sure to have plenty of contingency plans. Don’t lose track of the other design finishes you liked during your selections process. Have your interior designer keep a record of the top two options you liked for certain finishes (i.e. plumbing fixtures, countertop materials, etc.) so that if Option A goes up in price beyond what you’re willing to pay, you can pivot to Option B. This is particularly helpful for selections that are not only experiencing price hikes but growing lead times due to supply chain issues (appliances, some plumbing fixtures, materials imported from particular countries, etc.).



In this era, try to design your custom home or build your renovation scope SMALLER than what your budget can bear. In other words, base your original house plan or renovation scope on a lower budget than you have the flexibility to spend. Have your builder include a sizable contingency into your budget so that any unavoidable price increases during construction won’t bust your overall budget or derail your project.

This is a hard pill to swallow, but it will prevent a great deal of heartache and stress. Especially in today’s environment, no one can accurately predict exactly what pricing fluctuations on the hundreds of construction materials will do throughout your home’s construction. Having a robust budget and a builder who proactively monitors and manages that budget will make a world of difference.


As we all know quite well, every experience in life is made more tolerable by trying hard to stay positive. The custom homebuilding and renovating journeys can be overwhelming and frustrating at times, but with the right partners on board and a regular dose of trust, positivity, and good humor, you can overcome speed bumps efficiently and effectively.

We hope these tips for success will make navigating this age of inflation and volatility a little easier. The number one piece of advice we can offer is to choose the right team for your home. Strong collaboration between you, your architect, interior designer and custom builder will lead not only to the home of your dreams but to an enjoyable experience and fruitful relationships for years to come.


Renovations Design Ideas

Marie Sims

As a veteran team member of Sims Luxury Builders, Marie enjoys sharing what she’s learned with the world.


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