This is why we care about supply chain disruptions, and why you should too
How do supply chain disruptions affect the US real estate market, and why should you care?
Supply chain disruptions have become a major concern across industries and sectors, impacting everything from manufacturing and transportation to retail and real estate. As noted by John Viggers, CRE®, these disruptions are affecting nearly every aspect of real estate, leading to delays, rising costs, and the need for realignment in supply chain strategies and warehousing.
One of the biggest impacts of supply chain disruptions on the US real estate market is on prices. As demand for goods and materials continues to outpace supply, prices have skyrocketed, leading to higher costs for everything from building materials and labour to transportation and logistics. This has translated into higher prices for real estate as well, as developers and property owners struggle to obtain the materials and labour needed to build and maintain their properties.
In some cases, the shortages of materials and labour have resulted in delays or cancellations of construction projects, which can lead to further price increases. For example, if a developer has to delay a project due to a shortage of building materials, they may incur additional costs due to the delay, such as increased labour costs, storage costs for materials, and financing costs.
Another impact of supply chain disruptions on US real estate prices is on location decisions. As Viggers notes, delayed supply chain concerns are an unknown factor for developers, who are adding several months to their schedules and trusting vendors to get the labour and materials needed to meet construction deadlines. This uncertainty can lead to developers choosing more expensive or less desirable locations in order to ensure they can obtain the materials and labour they need to complete their projects.
So the supply chain disruptions affecting the US real estate market are complex and far-reaching, impacting everything from the availability of materials and labour to the cost of transportation and logistics.
As the world continues to grapple with these disruptions, it is likely that real estate prices will continue to be affected, making it essential for developers and property owners to stay ahead of these challenges in order to remain competitive in a rapidly changing market.