NEW BERLIN, WI – September 15, 2008 – Skyrocketing oil and gas prices are affecting more than driving habits this quarter. According to MSB, a leading resource for local building cost information, the average cost of roofing shingles spiked 17 percent since last quarter (see graph). The trend is continuing: in certain regions the company is seeing additional increases of as much as 9 percent since the end of July. As a result, MSB is issuing out-of-cycle building cost databases for its partial-loss claims estimating systems.
“The rising cost to repair or replace damaged roofs is especially significant as the hurricane season progresses. Insured losses from Hurricane Gustav are estimated to be in the billions of dollars, and Ike is close on his heels,” says Jonathan Kost, senior vice president of claims and commercial solutions at MSB. “Research shows that 90 percent of all property claims from hurricanes involve roof damage”.
MSB is part of the Information Products group of Vancouver-based MacDonald, Dettwiler and Associates, Ltd. Information Products focuses on real property related information, information management, and decision support products and services typically used by businesses and professionals involved in real-estate related transactions such as the buying, selling, transferring, mortgage financing, and insurance of properties.
Researchers in MSB’s Data Assets Group began seeing noticeable increases in shingle prices in mid-April. The unusually high increases are attributed mainly to the price of oil, which
affects transportation and manufacturing costs of the oil-based asphalt shingles.
Based on data collected from locations across United States, MSB reports an average material cost for 3-tab shingles of $49 per square as of the end of July 2008, a 17 percent increase since March 2008 and a 20 percent increase since July 2007. Based on these prices, the average national material cost to re-roof a 2200 square-foot home is an estimated $1,479 at the close of July 2008, compared to $1,255 for March 2008 and $1,230 for July 2007.
Kost adds that the current spike in the cost of shingles should not affect new home prices or insurable values significantly because of their relatively minor cost in proportion with the total cost of an average home.
1 Source: Institute for Business and Home Safety, HTTP://www.ibhs.org.
2 Calculations are based on the following assumptions: A 2,200 square foot home with attached two-car garage. Roof features include a 1 foot overhang and a 4/12 pitch.
Marshall & Swift / Boeckh (MSB), an MDA company, is the leading supplier of local building cost information, residential and commercial property valuation technology and services for the
property and casualty insurance sector in the United States and Canada. MSB has five offices throughout the U.S. and Canada. Visit MSB’s Web site at HTTP://www.msbinfo.com.
MDA provides advanced information solutions that capture and process vast amounts of data, produce essential information, and improve the decision making and operational performance of business and government organizations worldwide.Tags: Marshall & Swift / Boeckh (MSB)