The Log Home Industry Expert

There is no better time to build. Over the past 18 months, log home enthusiasts are seeing an encouraging trend in the home building industry; builders are willing to compete for their business. As a result, building costs have never been lower than they are now.

Timber Frame Entry

To capitalize on this trend and to better serve their clients, PrecisionCraft has put greater emphasis on their exclusive Builder Bid Administration process. Doing much of the groundwork for their clients, PrecisionCraft researches builders, request bids, and performs thorough reviews and evaluations of the builder bids received. From construction drawings to materials selection to their exclusive builder bidding process named BidRightSM, PrecisionCraft acts as the client’s advocate, ensuring the best price, highest quality and accountability from all parties involved. With that level of assurance, building a custom log home or timber frame home is feasible. Read more about why now is a good time to build.

Timber Frame Home, Custom Design

With uncertainty engulfing our economy, why would anyone build now? We are confronted daily with customers that are uneasy about moving forward with their building project in the middle of this current economic mess. Of course, each person or family has to evaluate their own financial situation and no one should build if they can’t afford it. But let me make three points before you decide to shelve your building plans:

1. Building costs will never be lower
2. Mortgage interest rates are at an all time low
3. Inflation (or hyperinflation) is on the horizon

See Yourself in 10 Years

Will you be kicking yourself and saying “I knew I should have pulled the trigger when building costs were at an all time low?” In 2019 material and labor costs are much higher and interest rates are on the rise. There are more government regulations and hoops to jump through, which are driving construction costs up even further. Thanks to stimulus spending a decade earlier, the country is experiencing double digit inflation. The smart money locked their 30 year mortgages at interest rates near 5%, and are repaying those loans with inflated dollars. And to make matters worse, since you didn’t build your home in 2009, you missed 10 years of enjoying it.

We all wish for a crystal ball so that we could gaze into the future and make better informed decisions today. Even without a crystal ball, the signs are pretty clear. We are in a tough economic environment; entering the 17th month of the longest recession since the Great Depression. It will probably be a long and protracted recovery before we are back to more normal. Some of the most pessimistic economists are predicting the recovery could last 10 years before real estate values are back to pre-2007 levels.

The Role of Inflation Tomorrow

At some point, we are going to have to pay for the stimulus spending. I’m not going to debate the merits of stimulus spending other than the reality that we cannot continue spending trillions and trillions without paying for it at some point in the future. It either gets paid via higher taxes or, the more politically expedient way, inflation. With all the money the Fed is pumping into the economy, once the recovery starts, inflation is bound to rear its head. Once inflation takes off, you best have your money invested in hard assets that will increase or retain real value. Better yet, leveraging those assets with fixed low interest rate loans that can be repaid with inflated dollars will yield a double inflationary hedge. Whatever you are feeling about real estate and, many people are not feeling very good, real estate is still the best protection against inflation.

The Upside

New home construction is at its lowest recorded level and there are more builders and subcontractors looking for work ever than ever before. Currently, it is a buyers market with tremendous opportunity to make deals that were unthinkable just a few months ago. Plus you don’t have to wait as long to begin building your project.

If you currently own your building lot and bought it before last year, most likely, your land is not worth as much as pre-2007 levels. But, what does that really mean? If you bought your land to hold long term and build say - a retirement home or family cabin to be held for a number of years and/or passed on to your family, then the land is the land. It still has all of the characteristics, beauty and other reasons that prompted you to buy it in the first place. If your intention is to build on your land, now is the building opportunity of a lifetime.

Bottom Line

Chances are pretty good that prices will not go much lower than they are today. It is more likely there will be upward pressure as the economy improves and inflation and interest rates will rise. Bottom line, if you are going to build, it is a far smarter bet to build today than wait. This is a historic time with historic opportunity.

Written by Tom Heatherington

There has not been a better time in years to build your log home!

If you permit the media to drive your decision making, you already know this is the worst possible time to make a lifestyle change. The housing market is in the tank, stock charts look as if they were printed from an oscilloscope, and upcoming elections (are intended to) make us feel anxious. If you include war news, terror reports, natural disasters and the Hollywood writer’s strike you must know this is absolutely the worst time to make serious lifestyle changes.

As the editor of the Log Cabin Directory, I have a unique perspective on the log home and timber frame business. In my daily routine I speak with people on both sides of the log home sales process. I answer phone calls and emails from prospective log home buyers, and I speak with builders, dealers and manufacturers on a regular basis.

It is no secret that the home building industry in general and the real estate market in particular are experiencing a downturn, which actually has been anticipated for a number of years. Although this slump has impacted the log and timber home segments of the market, it is not as severe as that being experienced by the conventional home building market. When such cyclic events occur buyers will often postpone their plans, which usually prompts manufacturers and builders to focus more on improving customer service and sharpening their pencils to attract new customers.

Economic cycles are part of life and there is not much new in this current phase. These cycles are always gut-wrenching, as we are experiencing them, but somehow we always get through them and business eventually goes back to normal. Think back to as recently as the dot-com meltdown of 2000-2001 when the stock market was blowing-off billions of dollars in profits. Companies were going bankrupt, banks were overextended and we watched TV like frightened deer in the headlights while the talking heads convinced us how bad things were. Imagine what your reaction would have been back then if someone told you that you’d be smart to build a custom log home, because it would probably double in value over then next 5-10 years.

This is why I believe that there is no better time to build a log home than now, because if you are a buyer, these current market conditions are exactly what you have been waiting for – whether you realize it or not. With the housing industry soft overall, you can expect to receive more attention and better service from builders than at anytime in recent years. Manufacturers have been reminded that you have a choice, and are focused on making you want to do business with them. This is a buyers market and as history has proven over and over again, that dream home of yours will cost you more to build later than it will today.

Any savvy investor will tell you that the time to buy is when a stock is out of favor. The apprehension from log home buyers in today’s market creates a huge opportunity for those willing to ignore the media’s fear-mongering and proceed with their dreams. Most people considering a log home have the funds or the credit worthiness to complete the process. The only thing lacking is the courage to ignore the crowd’s ill-advised mindset.

Now if you are planning to build a log home on spec and try to flip it for a quick profit, this may not be the most ideal time to play real estate roulette. However, if building a log or timber frame home to live in and enjoy has been part of your plan, there hasn’t been a better time in years to make it happen.

I am no Pollyanna. On the contrary, I have three daughters so I have been hard-wired to worry about everything. Additionally, I share the same concerns about the economy and my family’s future as you do yours, but every now and then someone has to slap me and tell me to focus on the things I can control. If a log home is part of your dream, take a lesson from history and don’t let Drudge or the ‘alphabet news channels’ talk you out of realizing your dream.

About the author: Tom Heatherington is the founder and editor of the “Log Cabin Directory”, one of the largest log home information sources online. He is the author of “The Complete Small Business Internet Guide” and numerous articles on log home living.