The Numbers Are In: Tips and Trends in Atlanta Construction

Chelsea Frye

A person is cutting a piece of plywood with a yellow power tool and wearing utility gloves and safety glasses.

To best understand the conditions of the Atlanta building market, BVL often uses a macro level view to offer insights and help predict where we’re heading in the back half of 2023. Recent research on the U.S. construction market, from industry experts at The Farnsworth Group, is helping shed light on what homeowners want, how contractors are doing and what builders can expect in the coming year. In this blog, we’ll assess these national trends and how they impact metro Atlanta.

To do so, we sat down and talked with Brand Vaughan Lumber’s new president and long-time building materials professional, Randy Hanscom.

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Homeowners and Home Projects

The construction and real estate industry in the U.S. is closely watched by several institutions, including Harvard’s Joint Center for Housing Studies. Harvard recently reported that after “more than a decade of continuous growth, annual spending on improvements and repairs to owner-occupied homes is expected to decline by early next year.”

And industry data from The Farnsworth Group indicates that DIY projects have not been as popular in recent months. A breakdown of the numbers:

  • Starting projects at home: 24% of homeowners are not starting small projects, and 54% say it’s a bad time for large projects
  • Planning ahead: 50% are planning to start a project in the next month, up from 40% in January of 2023
  • Project spending: 40% of homeowners are conservative with DIY projects, spending a maximum of $500 on current projects

When it comes to home improvements or remodels, homeowners leave the bigger projects to the professional, but budgets are tight. “Homebuyers are wanting to buy right now, but people aren’t selling due to interest rates. So it’s all about the new build markets,” explains Randy. “And the new lots available are selling fast when finished.”

In Atlanta, demand is so high for new homes that there is a backlog of projects, explains Randy Hanscom, Brand Vaughan Lumber’s new president. “So now, there’s not enough lots, and the lots that are available are selling like hotcakes when they get them finished,” explains Randy. “Our backlog through the last six months has continued to shrink because there were fewer lots to build on.”

Contractor Attitudes: Building in Atlanta

A person writes on a clipboard and is wearing a safety vest.

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Budget is one of the top hurdles that contractors have to work with right now on a project, and that can be impacted by factors outside of the construction process, including interest rates. “There is a magic mortgage payment people want to pay,” says Randy. “Builders have had to make smaller homes and trade down some of the finishes to keep payments down.”

Builders have become adept at creative solutions, and a lot of that happens through value engineering — by finding less expensive products or downsizing the square footage of a home. Randy explains that home buyers in Atlanta will want to consider this when shopping around. “Townhomes are popular. If you want to live in Atlanta, it’s going to be a condo-type home that is smaller. There might be fewer bells and whistles,” Randy says.

And he is straightforward that this is just the reality of today’s market, but there’s a motive behind the cutbacks. “Budget pricing is the top challenge for builders and contractors in Atlanta — because they want home buyers to be able to afford a home.”

Anyone in construction won’t be surprised to hear that the industry labor shortage has been another leading challenge, which has impacted builders for more than a few years. According to Building Design & Construction, “The number of workers with licensed skills hasn’t been enough to keep up with demand, and the ranks of licensed carpenters has actually declined in the last decade.”

Material Prices and Supply Shifts

A Brand Vaughan truck is at a warehouse to be loaded with materials

For builders, budget and labor issues on a project are further complicated by the supply chain and material costs. According to Farnsworth data, 24% of builders purchased a cheaper alternative product for their projects, and 20% of builders bought fewer materials to save on costs.

Brand Vaughan has weathered the changes in the building materials industry alongside our customers. “Historically, for about the last 10 years, lumber pricing hasn’t gone up a lot,” says Randy. However, the last two years were an upset for building materials, especially with the availability and pricing of lumber. “Lumber is a necessary evil, and it’s a big portion of the house. There was a scarcity of lumber, so gross margins increased.”

Those pricing increases have had a compound effect on builders across the United States in the last year. But today, lumber is “finally back down to ‘normal’ levels,” says Randy. “There’s plenty of supply, and we’re back to historical demand. We’re very optimistic that the turbulence of the past two to three years has started to rationalize.”

Looking Ahead in Atlanta Construction

A Brand Vaughan truck is parked outside of an apartment complex during the daytime

Randy and the team at Brand Vaughan are eagerly looking forward to next year. “We’re reaching the end of some abnormal cycles,” says Randy.

At Brand Vaughan, we work closely with customers and maintaining the partnerships established with manufacturers will help to steady some of the more turbulent times that might come up. “Builders are earning again, and we’re optimistic about that,” says Randy. “Is it where it needs to be? No, but we are on the way back up.”

Brand Vaughan is proud to support builders, designers and homeowners by staying on top of Atlanta building trends and other industry topics. Take a look at what we learned at this year’s International Builders Show.

Want support on your next project? Take a look at our estimating, installation and delivery services — we’ll walk through any step of the process with our customers, whether you’re a builder, DIYer or just need inspiration on your project. Contact us today for more information!