By Kristen Miller
Staff Writer

Tax credits may also apply when building an energy-efficient home

For those looking to build a new home, now might be the best time to do so.

Owner of Mayer Lumber Company, Rod Maetzold says now is the time to build since the cost of lumber is down 15 percent from last year and laborers are looking for work.

Because the demand for lumber is down, mills have reduced their prices. Also contributing to the low price of lumber is that shipping costs have gone down with the cost of fuel decreasing.

“If oil goes up, you can expect the cost of lumber to go up,” Maetzold said.

Since lumber is a commodity, the price depends on supply and demand, Maetzold explained.

With the new stimulus package expected to put people back to work again, building supplies, including lumber, will increase because there will be more demand for it.

“Now is the best time to be building,” Maetzold said.

The cost of materials, such as shingles, is also expected to rise with greater demand.

Despite oil prices decreasing dramatically from last fall, there is less oil in a barrel going toward making asphalt, keeping the cost of shingles high, explained Maetzold.

With the stimulus package expecting to boost the construction and repair of roads and bridges, there will be even less asphalt to make shingles, eventually driving up the costs even more, Maetzold said.

Not only is he expecting the cost of shingles to go up, but Maetzold is also expecting there to be a shortage of asphalt.

From a contractor’s perspective, Bruce Semke of Semke Construction in Cokato suggests now is the time for prospective builders to lock in a price at the lumberyard.

“[This is hard to do though] because the market is so unstable,” Semke said.

The cost of labor has also decreased because there isn’t any work, but once the industry starts picking up, labor prices will go back up as well, Semke explained.

Interests rates are at historic lows, hovering around the 5 percent mark, according to Jim Loe, vice president of the State Bank of Cokato.

There are a lot of factors working in favor of homebuyers and those looking to build, Loe said.

First-time homeowners, for instance, are eligible for a tax credit of up to $8,000 if a home is purchased between Jan. 1 and Dec. 1, 2009, with no repayment neccessary.

Aside from low interest rates, Semke has seen prices on existing homes and bare lots fall.

According to Semke, lots in and around the Cokato, Howard Lake, and Waverly area are almost half of what they were going for just a couple of years ago.

“Developers are trying to get rid of them and the banks want their money,” Semke said.

Building an energy-efficient home

Prospective builders may also want to consider a geothermal system when it comes time to install the heating and cooling equipment.

With the new stimulus package, taxpayers and new builders can save 30 percent off the equipment installation costs of a geothermal system with no limit. This tax credit isn’t going away soon either, since the plan signed is good until 2016.

A geothermal system takes the heat from the ground and transfers it to the house; in the summer, the process is reversed.

According to Brian Streich, this energy-efficient system is up to 400 percent efficient, saving up to 70 percent off the heating and cooling costs.

For additional information about energy-related tax credits including windows and doors, insulation, water heaters, and much more, visit www.energystar.gov.