Castle Data Services, a provider of residential replacement cost data, announced the results of a comprehensive statewide review of California building costs.
The results showed that while demand for housing in California has already been driving high inflation trends in the area, other factors such as the short supply of materials and labor are driving costs up as well.
One example of material cost increases, plywood, a major component of residential construction, was reported by The Bureau of Labor Statistics to have experienced a 53 percent average nationwide increase over the last year. In addition, labor costs, while they have not skyrocketed to the extent of wood products, are also on the rise.
Castle’s local cost experts have conducted more than 400 contractor interviews throughout California in the past six months. Sources also include numerous real-world property claims analyses, several government publications and information published by building experts, such as the National Association of Home Builders.
Glenn Polignano, Castle’s data and information manager, said “The Central Valley will see the most significant increase. Some areas have seen building costs increase more than 15 percent in the last year. Our cost experts are constantly monitoring these trends to be sure that our clients have access to the most accurate and up to date cost data available.”
Homeowners are reportedly encouraged to be aware of these increases and to take responsibility for making sure their homes are insured to value. California’s recent wildfires reportedly left underinsured homeowners outraged. In meetings with the California Insurance Commissioner, many reported that the actual cost to rebuild their homes was far greater than their homeowners policy coverage limits.
Craig Locante, president of ITV Solutions, noted “In a state where natural disasters like wildfires and earthquakes are commonplace, being up to date on your homeowners insurance is a must. I urge every homeowner to consult with their insurance agent and assess whether their coverage is sufficient to rebuild their home in the event of a total loss.”
Castle’s nationwide replacement cost data is updated quarterly by five digit zip code and on an as-needed basis. The recent changes in California building costs have been some of the largest increases reported to date.
For more information regarding Castle’s replacement cost sources and methods, visit: www.castledataservices.com
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