General Pricing Information
Fiberglass batt and blown insulation is treated like a commodity and therefore its value is driven by market and not manufacturing cost. Fiberglass pricing moves around with the economy while foam and other insulating materials are ultimately priced by the cost to manufacture. When building starts are spiraling down the split between foam and fiberglass is much greater than when building starts are showing positive growth.
Foam is currently about 4 times as much per R value as fiberglass. Fiberglass pricing is currently trending upward in price while foam is flat. I expect to see fiberglass price increase to exceed 30-40% by the end of 2013. Extruded polystyrene rigid board insulation pricing is steadily increasing and can be tracked by the cost of fuel. The higher the cost at the pump the higher the cost for extruded polystyrene rigid insulation.
Insurance expenses are gradually starting to consume profits. Colorado has passed legislation that is less than favorable for the building industry. Because of this legislation Colorado has become a target for law firms specializing in construction defect suits. This equates out to increased premium amounts for the entire construction industry. We have had success lowering our premiums by explaining our policies and what we do to prevent defective construction to our insurance carrier, broker, and underwriters.
Insurance certificates do not tell the holder what type of work the insured is actually insured to perform. If you ever question a subcontractor’s insurance you need to investigate their insurance certificate prior to the subcontractor starting work. Each type of work is filed into a separate class code. There are 3 different class codes for insulation work – organics (cellulose), plastics (polyurethane spray foam), and mineral wools (fiberglass). To verify what type of work a subcontractor is insured to perform contact their broker or carrier and ask them directly.
See our Resources page for a letter written by Thomas Miner to his broker, prior to his purchasing insurance for 2012.
I understand your reluctance to change. There are plenty of builders who have decades of experience and in the last 5 years a good portion of that experience has been replaced by new methods, new products, and new philosophies. Building science has been incorporated into new codes and products are being manufactured to meet the new codes. A builders’ ability to change will ultimately define their success over the next 10 years.
The construction market is at an all time low making it the best time to incorporate change into your day to day business. To stay competitive in the near future you need to know how to build a tight home and be prepared to test your work. If you do not document every step and the products you use to accomplish each step, now is a good time begin a system to track these things. More than anything, now is a great time to learn more about what the new requirements will be in the future. I expect better than 50% of all custom residences built in the mountain region will have a HERS rating incorporated into the contract by 2013. An easy way for a builder to respond to these market changes is to hire Division 7 for their projects.