Material Prices

boman47k

With petro prices going down, anyone seen shingle prices going down? If not, when do you expect to see them go down?

Kim626

it's all a matter of supply and demand, since shingle is not like petro which attracts a lot of speculation. if the housing market keeps week, shingle price is going down for sure.

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Kimberly J.
Los Angeles Roofing Consultant

J-Peffer

This has been my gripe for the past year.

I understand if the price of crude oil is up to $140 a barrel or at an all time high, a increase would be in order. This year prices have doubled on shingles. The letters about the increases simply say it's the "price of asphalt".

It's REALLY hard to explain to customers that are filling up at $2 a gallon. You are telling them about the prices increasing so fast because of the cost of oil.

From what I've heard/read. There has never been a price decrease in shingles. They just won't increase in price for the next 5 years.

I think it was a REALLY bad move though increasing them that much. Business's and contractors are already hurting and most home builders are hurting as well. New construction from coast to coast is way down and homes are sitting. The economy can't support the increase and business's and company's can't afford to take the hit.

They are all going up together though, so the people that do keep work, have no choice but to pay $80 a square. My first job this year I bought 30 year oakridge from lowes at $33 a square.

innovous

Ditto J-Peffer...I am getting calls from homeowners that I provided estimates for during the summer, and are now ready to replace their roof (just before winter hits).

Soooo....they have been saving some extra dough to cover whatever the ins. company is not, then I re-quote the job, then they sit down and say $#!^ we can't afford it because it is 30% higher.

I have been trying to find other areas to cut costs in every estimate...shopping dumpster companies for example.

Also, has anyone else noticed that manufacturers are slowly getting rid of their "lower-end" product lines, and limiting color choices?

Grumpy

Decreases are rumored on the 1st of January. In addition the manufacturers are locked into pricing at the time they buy their stock. if they buy it when prices are high they must sell it at the higher price. In addition I have said this too many times to list... Smart business dictates when volume goes down, markup must increasr to achieve the same profit. Since the new construction is a junk market manufacturers have lost huge volume and are passing their loss along to us, and we are passing that loss to our consumers.

I have done the same as the manufacturers and have increased my margin and I am having my best year even though we have had some very very major set backs including a very slow start to the year, summer lull, and a death of a key employee.

dougger222

So far this year I've been able to get every insurance company to pay on current Xactimate 1/4 price list. Had one lady who said no way but when the check came sure enough she paid on it.

Recently sealed the deal on a claim that was two years and three months old and got them to bumper it up $9,000. Only catch is it's got to be done by Dec. 31.

Got a bunch of big insurance jobs that are being held off until the Spring so would really like to see a price decrease. Most have already been paid in full by their insurance companies.

My lumber yard rep thinks they are going to come down soon.

mattp

I know the new construction market is down. With all the storm work though the demand of shingles is still there. Right?

Grumpy

Yes and no. That's the excuse we are now getting but we have storms every year. We have hail and hurricanes every year. It's all propaganda sppon fed to us by our suppliers who are spoon fed by the manufacturers. I've read new home construction is down 85% in some areas, there is no way anyone can tell me that storm work is totally and compeltely covering for that new construction loss.

dougger222

A friend of mine who hauls granuals from 3M's plant in WI to CT in MN was laid off two in a half week for maintainance (sp?). He was scheduled to return Nov 17. He go the call yesterday that they will be laid off until Dec 1st due to something wrong with the sealant and they want to get it right before they make shingles again.

My guess is they are still overstocked and don't want the demand to plummet which could bring the cost down. They gotta love roofers/home owners paying close to $100 a square for these things!

buildpinnacle

Douger,

What do you mean you have been able to get the insurance company to pay off of Xactimate. How else would they pay, other than Integri, Powerclaim, Simsol etc. I have never had a problem with ins companies paying off of database pricing. Actually, since Xactimate only updates every three months, I am continually filing supplements to the insurance company for underpaid claims. I just forward them the letter from the majors announcing the price increases every month and they pay the difference. I had a couple claims that we contracted in March when lams were $44.00/SQ. I just did these roofs last month and the insurance supplements were in the thousands on each. No complaints and no fight from them. We always have a 'rising' material prices clause on all insurance claim contracts and a clause that allows us to supplement any and all items and all supplements are ours.

Personally, shingles have not increased like this, ever. I have supplier reps that have been in this business for over 40 years and have never seen the market do this. My personal opinion is that they will not come down. They may not go up, but they will not come down. They never have before. Also, don't let the $60.00 oil fool you either. Just fill up as many tanks as you can for $2.00 a gallon while it lasts.

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Grumpy

Screw all those programs. Here is the price to do it right.

I don't allow some cummulative national average of pricing dictate what I charge for my services. The problem is not the data base, the problem is the database pricing isn't high enough to make money. How can you do a job for insurance prices and make money? I can't, I won't even make enough money to cover direct job costs (labor and material only) BEFORE profit and overhead if I work for insurance prices.

concretemasonry

Too many people think they should get too many jobs that they bid, even though they might not be able to do them if they did get them.

The trick is to know when to not bother and concentrate on the more reasonable jobs for your company to do. That way the "dumb guys" are too busy to get greedy and take the desirable work.

Because shingles are a major concern, make sure you get a good relationship with one or maybe two suppliers, so can establish a business presence and get some idea of what may be happening in the supply and price chain. This relationship can also open the doors to more information and the possibility of some price protection IF you have some loyalty.

My main background is concrete products, so obviously cement cost and availability was a major item we could not control. Most companies have one or two suppliers and rarely argue about the minor price differences. We chose one the one supplier route and let him know he was his responsibility to be our only supplier with a guarantee that he would never sell to others cheaper (except highway bid jobs). When there were projected shortages, we were informed of any planned maintenance and when we should buy elsewhere to guarantee cement when we needed it. We also got information on projected pricing and availability. We also got reasonably accurate information on the cement pricing from other customers of the same supplier.

If you have one major material that is necessary to your business, make sure you plan ahead and protect yourself by knowing the estimated pricing and availability to help you plan and bid better.

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Dick

Engineer, designer and consultant recently active domestically and internationally on construction and design in about 35 countries.

dougger222

Download the Minneapolis, MN price 4th quarter price list once. The prices will be well over double then Xactimate pays in your area. That being said there's plenty of money in there for shingle cost increases. I get them to pay on the 1/4 that the job is being done. The other software programs pay a lot less in MN than Xactimate pays.

For example just got the deal sealed with a big insurance carrier off 4th quarter Xactimate. 21sq 2 layer tear off 4/12 hip roof 3 tab 25 year comp, $517.29 per square. I don't like biting the hand that feeds me more than I have to. What would that roof pay for you in Texas?

Gas today was $1.79 a gallon, E85 $1.39. Diesel is still up there though.

The only fighting I have to do with insurance companies is with the ones that don't use Xactimate.

dougger222

If you have Xactimate you should be getting emails indicating price updates for the Texas hurricane area at least once a month. They are interim price lists.

I buy from one lumber yard going on 10 years now and the loyalty has paid off in the past couple years. This year for example they gave me several insurance jobs. One was $23K another was $21K, nice insurance jobs!

buildpinnacle

Douger:

Got you. I didn't read your post that way at first. I run into the same thing from time to time. Integriclaim adjusters are fairly close, but Simsol, Powerclaim and the like are usually pretty far off. It's no secret that TX has been at the bottom of the barrel on roofing prices for years. When I hear what other states in the upper midwest and east coast are paying for shingles it amazes me. On top of that, even when we do get 'top dollar' for our area, we have bottom dwellers who sell strictly off of volume trying to make $5-600 per house. It's ridiculous. I agree with Grumpy. I try to do less jobs and make more money. I have always made good monies on Insurance work. If you don't like the database price, you can go in and adjust it to reflect the current market. Everything can be adjusted if needed, just like any other estimation software.

BTW, I do get the updates from the coast, Douger on Xactimate.

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buildpinnacle

Douger:

To answer your question about the 21 sq 4/12....we would be around $205/SQ here not counting turbines, ridgevents, plumbing boots, or the like not mentioned. 3 tab materials are averaging +/- $90.00 per sq installed with labor at $52 on this particular roof with the xtra $10 for the second t/o.

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Grumpy

Statefarm uses xactimate yes?

I just bid a job and Statefarm was offering less than $200 a square before depreciation. This was a 2 layer, 2 story, 12/12 very cut up. All the typical line items were there except dumpster and permit... The problem is all the price per line item was just way way too low. They had put a price on 1/2 the detached garage, what they were paying for labor and material and overhead was not even enough to cover the material cost. Literally materials would have cost more than what the insurance company was willing to pay.

Yes before you ask, it was a recent price from the insurance company. Also the prices I am mentionign are before depreciation.

Insurance companies just do not pay enough.

buildpinnacle

'Big Red' (state farm) is notorious for sloping roofs and patching. I had a good contractor friend of mine try to get into CAT adjusting with Pilot Cat after Ike and was sent to S.F. certification school, etc to work their claims. After his first 30 claims were submitted and returned b/c he was buying roofs and they wanted more proof, questioned his methods, itegrity, etc. he came home. He had roofs that were 40 years old, brittle, and crumbled under foot that they wanted to replace individual shingles on. Trust me, I know a lot of insurance CAT adjusters and they won't work for them either. I'm usually not one to burn bridges, but with them I don't care. They are unscrupulious (sp?) and do not hold their clients interests even remotely at hand. Worst insurance company on the planet. In addition, ask Grump, when they do actually pay for a roof, they have their own version of Xactimate that is ridiculously lower than that of which the rest of us use. Legalized thieving if you ask me.

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dougger222

State Farm uses Xactimate here in MN and the lowest I've seen them pay is $319 a square. It was this Summer on a 36 year old roof with wind damage. They paid for the whole thing but it was only two sides with no drip edge. Just turtle vents, plumbing vents, and exhaust vents, one story.
As a matter of fact I made good money on it as it only took 4.5 hours to do, 22 squares. State Farm does use it's own price list but I guess if your the biggest insurance carrier in the nation you can do what you want!

The best money is on 7/12 hip roofs with R&R laminates.

What is strange about MN and Xactimate is if you go to Mankato the prices look like Texas. Rochester and Duluth pay good though but not as much as Minneapolis.

buildpinnacle

I stand corrected...just bought a 3 tab 20 yr at $62.00 per square form our supplier (even though big box store still has them for $59.55). They have gone down about $4.00 per square in about three weeks.

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