Construction materials costs stay level

Construction costs in Miami-Dade remain flat without any signs of escalation, according to those involved.

Some of the commodities like concrete and steel have leveled off to the point that they are holding their prices throughout the duration of the project, which was not the case in 2022 and 2023, said Al Fernandez, the CEO of ANF Group.

“But of course, that has a lot to do with the fact that some of the developers are not starting their projects due to different outside forces,” he said, “interest rates being one of them, lack of equity from investors. So, I think that the slowdown of some of the projects has helped level off some of this pricing on the material.”

Construction materials like shell of concrete and electrical gear are still at a point where it takes an extraordinary amount of time to get after being ordered, Mr. Fernandez said. “It has taken somewhere between 60 to 70 weeks to get some of the switchgear.”

In general, materials for interior finishes are again leveling off, he added, but they’re still higher than four years ago.

“I think costs leveled off, but it’s not going down and you don’t see that happening anytime soon. I believe that the pricing has reset itself and we’re all going to be happy to just be able to not have them not to continue to increase,” Mr. Fernandez explained. “But I don’t expect for pricing to go down in the near future.”

In 2023, ANF Group delivered the 263 residential building Madison Point Apartments at 26021 S Dixie Hwy. and is about to complete Sol Vista at 11251 SW 200th St., which is a 227-unit building reserved for persons 62 and older and those earning no more than 60% of the area Median Income.

“There’s also to keep in mind, South Florida is unique,” Mr. Fernandez said. “So, whatever you see in South Florida may not be the norm throughout the country. But South Florida is still extremely busy with work being put in place so until that subsides, you’re not going to see a decrease in pricing for the materials or from the subcontractors. The good news is that you’re not seeing continual volatile escalation like we had over the last 18 to 24 months.”

One area that hasn’t dropped overall is labor, said Brian Sudduth, president of Miller Construction

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“It just costs more to live here,” he said. “Interest rates are a big item, willingness to lend money and combined with the insurance rates are big money, especially for multifamily or some other spec development. Money is not there like it used to be and when you do get it, the interest rates are a lot higher. There’s also been a softening with the institutional money that has catered to supporting and backing the projects, and then land costs are still really high.”

“From a developer standpoint, there’s not as much money out there from the banks,” he continued, “laying costs are still high and land growth has slowed. All five of those things are definitely headwinds that developers are facing in the market today.”