To all professionals managing the repair and maintenance of distressed properties—your cost of doing business may not be what you think it is. Xactware cost data indicated price volatility throughout many categories during 2018 and early 2019. These price fluctuations, some of which were quite sudden, rendered older and outdated pricing data sets too unreliable for making business decisions. Combined with the competitive pressures of the shrinking foreclosure market over the last ten years, using regularly updated and researched local pricing data is more critical than ever. Without proper safeguards, these dramatic shifts in costs can swing allowance thresholds and undermine profitability in ways that can seriously injure businesses over time.
Getting the numbers right. To illustrate the point, we’ll first look at retail labor rates by trade for drywallers. According to Xactware pricing trend data, 2018 average property preservation and maintenance retail labor rates rose by an average 4.3% across the board, with drywall installers showing a 10% increase. Combined with a 4% rise in the cost of drywall materials, it’s easy to see that if the average rates for all trades were applied to servicer’s charges, they would not have accounted for the particular spike seen in the drywall industry.
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