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How is the Covid-19 affecting construction projects?

I am looking to build a 4 plex and have everything lined up to build. Is it smart to wait to see if the building prices will fall after while the pandemic is still going on? I would love to have your thoughts of how this will impact costs of construction in Northern Utah?

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Apr 1, 2020

Utah doesn't have a statewide stay home order in place like other states do. As a result, there isn't clear guidance on what work can and cannot continue. So, it'd be important to check for any county or city orders that have restricted what businesses can operate. Still, in many cases, there are pretty broad exceptions from stay home orders for those in the construction industry. Plus, as long as social distancing can be maintained, it looks like most construction projects and businesses will be able to continue to work, at least for now. With that being said, I'm not sure it's a great time to start a construction project. Across the country, it's pretty common for permitting and inspections to close or claw back their operations. Plus, it'd be pretty hard to argue that a new, multi-family residential project would be essential at a time like this one. But, if you can obtain the necessary permits and inspections, if the construction businesses involve feel they can safely carry out the work, and if their working isn't blocked by state or local ordinance - then proceeding with a project may be possible. To keep an eye on whether construction work can be undertaken, this tracker should be valuable: Can I do Construction Work In my State? It's being updated several times a day, and we'll post Utah's stay home orde if/when it comes down.

How will the coronavirus outbreak affect the construction outlook going forward?

As for how the coronavirus outbreak will impact construction costs - that's hard to say since it doesn't look like things will be getting better particularly soon. Plus, certainly, the outlook will be highly dependent on your perspective. For construction businesses where cash is tight - it will be hard to weather the storm and to get back into the swing of things while also avoiding pitfalls. For owners and developers properly situated, that will be a much different outlook. Currently, it looks like it's pretty cheap to get funding. Plus, firms will be eager to get to work once the COVID-19 pandemic settles down. So, presumably, it will be a good time to be building if financing can be secured and if contractors, subs, and suppliers can be sourced. So, owners and developers should be in a pretty good spot coming out of the coronavirus shutdown (assuming they can weather the storm, themselves). However, following the COVID-19 outbreak, it will be more important than ever to have a sound construction contract in place and to pre-screen contractors, subs, and suppliers. Further, it will be crucial to utilize sound processes for requiring and collecting lien waivers. That way, a contractor, sub, or supplier can be fairly and quickly paid without the fear of a payment dispute arising out of nowhere. With cash tight, there's a chance that disputes will be exacerbated if they aren't prevented from the get-go.

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