“How expensive?” tracks measurements of California’s totally unaffordable housing market.
The pain: California’s home-repair inflation rate has more than doubled during the past five years.
The source: My trusty spreadsheet reviewed the California slice of the Verisk Remodel Index. These insurance industry consultants track “costs on 31 different categories of home repair, covering over 10,000 line items ranging from appliances to windows.”
The pinch
Verisk says a typical California repair cost is up 40% in the past five years, compared with a 16% jump in the previous five years.
It’s no Golden State quirk, by the way. Nationally, repairs are 40% costlier since 2019 and increased 15% the previous five years.
Painful points
First, consider overall construction wages, as tracked by one federal index. Verisk says they’re currently 62% of California repair costs.
The average weekly wage of a California construction worker is up 21% in the five years ended in June. That compares with a 17% hike in the previous five years.
Repair’s big headache has been the ballooning costs of stuff used in construction. Everything from pandemic-linked shortages to that era’s building boom – remodels and new units – pushed up pricing.
One federal index of wholesale prices for all construction supplies soared 38% in the five years ended in September. That’s a radical switch from 9% gains in the previous five years.
One slice
Home repair is yet another cost-of-living whack to the wallet.
Ponder overall US inflation in this timeframe, as seen by the Consumer Price Index: It surged 23% over five years, compared with just 8% in 2014-19.
Do I need to remind anyone about California’s home values? They’re up 47% in five years vs. a 33% gain in 2014-19, as measured by one federal price index.
And repair costs also help explain rising home-insurance rates – assuming somebody might insure your house!
Typical California premiums jumped 40% in the five years ended in 2021, according to the Little Hoover Commission. Rates rose just 3% in the previous five years.