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THE SUPPLY-CHAIN DILEMMA

Since the beginning of the pandemic, builders have consistently reported supply chain issues, which in turn, are causing significant construction delays. Not surprisingly, single-family home starts dropped in January. MidCentury, like all other builders, is dealing with lumber, window, appliances, and garage door shortages (we'll only name a few examples). On top of that, there has been a steady rise in permitting (11.4% higher, in fact). Everyone wants a home, but we're all waiting for the paint to dry.

The National Association of Home Builders asked single-family builders what they were facing with volatile lumber prices, and nearly half (47%) said they were including price escalation clauses in their sales contracts as a primary mitigation effort. It used to take 180 days to build a single-family home and now it takes that long just to get building materials.

Due to these material shortages, job delays, and the mere fact that construction superintendents are having to find creative ways to move a project forward, the construction industry is facing a job shortage. An estimated 1.2M construction workers will leave for other industries in 2022 and the number of construction job openings jumped to 410,000 in October 2021, marking the highest level on record.

What does this all mean? Simply that we're all on this struggle bus together. However, MidCentury is working every day to critically think through all of these unique dilemmas. The department heads meet every week to discuss strategies for problems no builder has encountered before. We're frustrated just like you, but we've also seen an uptick with our build times lately, simply by finding solutions to problems before they arise.

NASDAQ LUMBER HISTORICAL DATA AS OF MARCH 8, 2022
 

SHORT-TERM RENTAL 2022 STATS

NEW BRAUNFELS SHORT-TERM RENTAL DATA FROM AIRDNA

Here are some of our favorite real estate investment stats for 2022:

  • Sales of vacation homes skyrocketed during the pandemic, with sales outpacing the growth of existing home sales by nearly 300%. (NAR)

  • The average nightly rental rate in the US for short-term rentals is $202.50 per night, with 60% of stays being seven days or longer. (Hotel Tech Report)

  • The average nightly rental rate in New Braunfels is $320.00 per night, with an occupancy rate of 50%. (AIRDNA)

  • The short-term rental market was valued at $87 billion in revenue in 2019. It is expected to have a compound annual growth rate of 3.4% over the next 5 years. (Grandview Research)

  • Individual real estate investors account for 72.5% of rental properties in the United States. (Pew Research Center)

 

MIDCENTURY & GRUENE LAKE RANCH

EARLY RENDERING OF THE COMMUNITY SPACE AT GRUENE LAKE RANCH

MidCentury Custom Homes has transformed into MidCentury Communities. We're still a residential single-family home builder, but now we're adding short-term rental resorts to the mix. Our first Texas Hill Country short-term rental community, Gruene Lake Ranch, has already started mobilizing in Gruene, Texas (just outside of New Braunfels). We've kept the classic MidCentury designs but in smaller cabin floor plans. We are currently auctioning the first 45 cabins with Doorsey. If you'd like to learn more about this unique investment opportunity, click below to join the Gruene Lake Ranch email list.



 

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