For those of you waiting for pool prices to drop before committing to one, you may be waiting a while longer. With rumors of a recession coming and a "bubble" in the housing market, the consensus is pricing in the residential construction market “bubble” must pop eventually. Unfortunately for those waiting for this pop, it will not be happening in the pool industry. While most industries began increasing prices in 2020 and 2021 (or using shrinkflation, which is a fun topic to research when you have the time), the same can not be said for pool builders. Many pool companies were late to raise prices once the pandemic started to increase the cost of labor and materials; as well as halting supply chains. This late response by pool builders has created a disconnect between the public's perception of pool pricing and the pool industry versus the reality of them. This disconnect is why we will be taking a deeper dive into realistic pool pricing and what will keep prices from coming down this year.
Why has pool pricing increased?
A quick Google search of pool pricing pre-pandemic and even up until late 2021, brings up plenty of articles and blogs pricing concrete pool installation for $35,000-$60,000. This is not the case anymore if you are getting a pool quote recently... you are seeing base pools starting around $50,000-$75,000 today. If you had received pool quotes pre-pandemic and at the beginning of the pandemic, it may feel like you are being taken advantage of by the pool builder. This pricing, however, is starting to become the norm across the industry, and in a survey done by PoolMagazine: 73% of 1000 pool professionals surveyed have increased pricing by more than 30% since 2020. So, what is the driving cause behind these price hikes?
This drastic jump in starting prices of concrete pools is a culmination of many factors brought on by the pandemic. The lack of response by many pool contractors just made the price increase more noticeable immediately. The factors builders and contractors are having to face are:
Increased demand and not enough skilled labor: Lockdowns and working from home left more people using and looking at their outdoor living space more than they previously did. This paired with people no longer being able to use discretionary income, led to a boom in the demand for pools. A record number of permits were filed in many counties across the nation. While this demand is amazing for pool builders, the manpower they have can only build so many pools in a year. For the first time in the 2000s, job openings in the construction industry surpassed the number of employees hired for these roles. A lack of qualified applicants is keeping builders from keeping up with demand. This creates a premium on pricing as consumers are now competing for the opportunity to get on the contractor's schedule.
The increased cost of materials and equipment needed: The beginning of the pandemic saw a slight decrease in material costs (this is due in part to many projects being halted and dropping the demand for these materials) but, since April 2020 we have seen materials costs rise 30%-60% with no sight near for them going down. Some major products that we pool builders use that have seen a drastic price increase are:
These are just some of the major price increases seen in the construction industry as a whole. Supply chain delays or just complete stoppages have also played a major part in why pool prices have increased. One example would be the halted production of chips that are necessary for the production process of trucks, power equipment, and heavy machinery; making it impossible to get new equipment and leaving used equipment more expensive than the original MSRP.
A delayed reaction to increasing costs: The beginning of national lockdowns saw many contractors not adjusting their pricing just to keep their crews busy. This could only go on for so long before something needed to change: either they needed to increase prices or they would need to shut down. This is what we saw happen a lot in 2021: contractors closing up shop or having to hike their prices to make a profit. It was not until roughly mid-2022 when bid prices finally caught up to the rise in costs builders were facing. This delayed reaction to increased costs and market changes is what caused the disconnection between homeowner perception of what a pool costs to have built and what it actually costs to be built. If you do a Google search on concrete pool pricing now, many of the articles were published near the end of 2022 with a majority of them agreeing with a concrete pool starts at around $55,000. We agree with this observation, to properly build a concrete shell pool you should expect to see them starting around $60'000. If you are getting quotes much lower than this, then it may be time to rethink this contractor. In our next blog post, we will be informing you on how to vet pool builders and contractors for your project.
Will we be seeing pool pricing drop?
While consumers expect pricing to come crashing down, that typically is not the case for pool contractors. Experienced builders who were around during the 2008 recession, only saw pricing drops occasionally for only 2%-5% just to fill gaps in the contractors’ schedules. While demand is low during these times, builders' costs do not tend to decrease. Typically building materials continue to increase in price, labor prices must be increased to keep skilled workers, and regulation costs always increase. While companies can take a small hit to profits while still staying afloat, prices have to increase if the business wants to make it out of these periods of uncertainty in the market. The same is going to be true for the current period of economic uncertainty.
What should a concrete pool cost in 2023?
Knowing what we know now, it is safe to say that you should expect a base concrete shell pool to start around $55,000. As you add more decking, water features, and other outdoor living features you may start to see your project costing $100,000-$150,000. If you want to start building today with a reputable, luxury, custom pool company: contact Island Way Pools today! https://www.islandwaypools.net/contact