The Truth Behind Home Prices – Kansas City Home Builders Association
The home-building process is an intricate journey requiring expertise, strategic planning, and an unwavering commitment to quality. In a recent episode of HBA After Hours, Will Ruder and Jen Bertrand of the Kansas City Home Builders Association (HBA) sat down with Dennis Shriver, President of the HBA for 2024 and the owner of Hearthside Homes, to tackle a question on everyone’s mind—why are homes so expensive right now?
With decades of experience in the industry, Dennis offered expert insight into the factors driving up home prices, the importance of builder-client relationships, and what every homeowner should know before selecting a builder. In this blog post, we’ll break down the key takeaways from the conversation, giving you a behind-the-scenes look at the home-building industry, the challenges builders face, and how to set the right expectations when embarking on your own home-buying journey. Whether you’re a prospective homeowner or an industry professional, this discussion is packed with valuable insights to help you make informed decisions.
Before we dive in, welcome to Hearthside Homes of Kansas City! Since 1987, Hearthside Homes has been helping families turn their dream homes into reality in the Kansas City Northland. With nearly 2,000 completed homes across Kansas City, Parkville, Kearney, and Liberty, we specialize in expertly designed floor plans in the $400k-$700k range. Whether you’re looking for a move-in-ready home or want to build from the ground up, our process is designed to be seamless and stress-free. We take pride in our craftsmanship, attention to detail, and dedication to providing quality homes that fit modern lifestyles.
Be sure to explore our available listings, browse our gallery, and learn more about the vibrant communities we build in. Now, let’s dive into our interview with the Kansas City Home Builders Association and hear Dennis Shriver’s expert take on home pricing and more.
Meet Dennis Shriver
Dennis Shriver’s journey in the home-building industry is marked by experience, resilience, and an unwavering dedication to his craft. As the owner of Hearthside Homes, he has played a vital role in shaping communities in Kansas City’s Northland.
“I own Hearthside Homes of Kansas City. We primarily focus in the Northland of Kansas City. I bought the company in 2009 and have been with it ever since, although the company started in 1987,” Dennis shared.
Taking ownership in 2009—a period of economic uncertainty—showcases his determination and ability to navigate challenges. With his military background and decades of experience in home building, Dennis brings a structured approach to delivering high-quality homes tailored to modern homeowners’ needs.
Why Are Homes So Expensive?
One of the biggest questions homeowners ask is why new construction homes cost so much. Dennis provided a detailed breakdown of the various factors driving prices up:
- Material Costs – “There’s lots of different things—Lumber, tile, drywall—those are a bulk of the costs.” The price of essential building materials fluctuates due to supply chain issues, inflation, and increased demand, making construction more expensive.
- Land Costs – “Land runs roughly 16 to 20% of the price of a new home.” The cost of land varies based on location, availability, and development requirements, all of which significantly impact the overall price of a new home.
- Regulatory Costs – “Regulatory costs run about 23-24% of the price of a home right now.” These expenses include building codes, permits, impact fees, and other compliance costs that municipalities require, adding a significant financial burden to home construction.
- Zoning & Bureaucratic Processes – “Before you can even think about getting a building permit, you have to get that zone properly and oftentimes that takes an army of attorneys.” Rezoning and obtaining permits can be a lengthy and costly process, involving legal fees and compliance with various regulations before construction can even begin.
Beyond these costs, Dennis emphasized that home buyers often don’t realize the behind-the-scenes expenses that contribute to the final price. “They see the lumber, they see the drywall, they see the tile—that makes sense to them. But they don’t understand all the things behind the scenes to even get to that point.”
The Importance Of Builder-Client Relationships
Building a home is a collaborative effort, and choosing the right builder is crucial. Dennis highlighted the importance of understanding the builder’s process and ensuring clear communication throughout the journey. Here’s what he suggested you ask before signing the dotted line with a builder.
“I would want to know, first of all, do they have a process? And if so, what is it? How are they going to communicate with me? How am I going to be kept informed as to the process?”
Finding a builder who aligns with a homeowner’s vision is key to a smooth experience. “Most builders are all trying to put out a good house, but they go about it in different ways. Some are focused on high-end luxury, some on energy efficiency, and others on cost-effectiveness. It’s important to find a builder that matches your mindset.”
At Hearthside Homes, we understand that building a home is a major investment, which is why we prioritize transparency and communication throughout the entire process. Our team is committed to making the experience simple and stress-free, and a key part of that commitment is our online client portal, Buildertrend. This tool keeps homeowners informed every step of the way, providing real-time progress updates, change orders, and job site photos—all in one convenient place. Not all builders offer this level of accessibility and organization, which is why working with a builder who values clear communication makes all the difference.
Fixed Price vs. Cost Plus Contracts
One of the most pressing concerns for homebuyers is understanding how pricing works. Dennis weighed in on the debate between fixed-price contracts and cost-plus agreements, emphasizing that it ultimately comes down to what the homeowner values most—cost certainty or flexibility.
“If I was hiring somebody to build it for me, I would do fixed. Myself, as a consumer, I want to know what this project is going to cost me to the penny.”
At Hearthside Homes, we understand that material selections and upgrades can lead to change orders and additional costs. However, when you sign a contract with us, your home is built within that agreed-upon price—without the risk of unexpected expenses creeping up later. Our fixed-price approach ensures that you can confidently plan your budget, knowing there won’t be surprise costs down the road. This pricing model benefits both the builder and the homeowner, creating a smoother and more predictable building experience.
Spec Homes vs. Custom Builds
Hearthside Homes specializes in spec homes—homes built in anticipation of a buyer rather than fully custom builds designed for a specific client. However, we are also a semi-custom home builder, offering homeowners the opportunity to personalize their new home while working within one of our expertly designed floor plans. This means our clients can build from the ground up, selecting finishes such as tile, paint, cabinetry, flooring, and more at our Design Center—but we do not create fully custom layouts from scratch.
This approach allows us to maintain efficiency and predictability throughout the building process, ensuring a relatively quick timeline for homeowners while providing accurate pricing from the start. By streamlining the design and construction phases, we make the home-building experience smoother and more stress-free for our clients.
Dennis explained why spec homes are a critical part of the market:
“If you’re going to build a spec home, you want it to be in a location that is thriving, that’s popular, where people want to be.”
Spec home builders must anticipate market demand and strategically design homes that appeal to a broad range of buyers. “If you’re targeting young families, it might be a two-story. If you’re targeting retirees, it might be a ranch. You have to know the demographics of the area.”
Given the current housing shortage in Kansas City, spec homes play a crucial role in providing move-in-ready housing options. According to the Mid-America Regional Council, the city is short by approximately 24,000 housing units, making ongoing home production essential.
Key Questions To Ask A Builder
For those considering building a home, Dennis recommended asking the following questions to ensure a smooth and successful experience. After all, choosing the right builder is one of the most critical decisions in the home-building process, and asking the right questions upfront can help prevent unexpected challenges down the road.
- What is your process? Ensure the builder has a structured approach to home building.
- How do you communicate with clients? Find out if they use apps, emails, phone calls, or in-person meetings.
- How are financial aspects handled? Clarify whether it’s a fixed-price or cost-plus contract.
- What is your project management structure? Ask how many projects they take on at once and how often they visit job sites.
- Can I speak with past clients? Talking to previous homeowners can provide valuable insights into the builder’s reliability.
Dennis emphasized the importance of researching and choosing a builder carefully. “Talk to existing homeowners—most people who recently built a home love to talk about their experience. You’ll hear the good and the bad.”
Final Thoughts: Expectations & Communication Are Key
Building a home is a significant investment, and understanding the process can make all the difference. Dennis and the hosts of HBA stressed that clear expectations, strong communication, and a reliable builder-client relationship contribute to a successful project.
“At Hearthside Homes, we have a Builder Liaison who proactively communicates with homeowners. Our superintendents are in the field managing construction, and our liaison helps interpret updates in a way that makes sense to homeowners.”
For those considering building a home, the Kansas City Home Builders Association offers resources and events, such as the Parade of Homes, where prospective buyers can explore different builders’ work.
If you’re in the market for a new home or considering building from the ground up, Hearthside Homes stands ready to guide you through the process with expertise and transparency. Click here to check out our current listings and be sure to follow the fun on Facebook and Instagram.
Listen to the full podcast episode here: HBA After Hours Podcast
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