It’s already August and the Colorado summer seems to be whizzing by just like it does every year.  Before we know it, we’ll be shopping the back-to-school specials in the paper, buying soccer and football cleats for our kids, and all of our home-improvement plans we had for this summer will be put off yet again until next year.

As co-owner of Premier Roofing Company, I can tell you that every year we have an influx of business in the months of September and October as all of our customers finally pull the trigger on their home improvement decisions.  I call it “the Fall Rush,” and I wish I could get my customers to make their decisions sooner, but I understand- I’m one of the worst procrastinators I know.

The problem with putting off the installation of a new roof is that roofing materials, in particular asphalt shingles (our most popular product) get more and more expensive every year.  Just last month I received yet another notice that I was facing greater than 5% increases in price from my suppliers on my most common commodities- asphalt shingles and asphalt underlayment (felt and ice/water shield).  Now, this may not sound like a big deal, but we have seen increases like this almost semi-annually for the last few years.  Our average invoice for a roof replacement has increased almost 33% since 2005 while inflation and the cost of labor have increased by negligible percentages comparatively.

There are many factors that contribute to the rise in cost of asphalt-based roofing products.  The most obvious and greatest contributor to this rise is the increase in the price of oil we witnessed a few years ago when oil spiked to $145/barrel.  Since then, oil has leveled off- dropping all the way to sub $40 levels in early 2009 and settling between $60 and $80 recently (http://www.nyse.tv/crude-oil-price-history.htm), but asphalt roofing prices have continued their steady rise in spite of the major shifts in the price of oil.

One major contributor to this steady rise in roofing prices is the decrease in the availability of asphalt.  90% of all asphalt is used for pavement while less than 10% is used in the roofing industry (Asphalt Institute).  As the economy stumbles and the home improvement and home building industries falter, one would assume that prices for asphalt shingles and other bituminous residential construction products would slide, but increased use of asphalt in transportation projects appears to have a much greater impact on the consumption of asphalt.

Every day on my way to work on I-25, I see signs for “The American Recovery and Reinvestment Act” showing our tax dollars at work.  According to www.recovery.gov, approximately $16.4 billion has been released by the Department of Transportation for reinvestment nationwide.  One can assume that a considerable percentage of this budget is being used by local governments to resurface and pave our roadways.  The impact of the current decline in home building and home improvement on asphalt prices pales in comparison to the steady demand for asphalt in pavement, especially with the recent increase in transportation projects courtesy of our federal government.

Another factor affecting asphalt prices is the increased efficiency of oil refining facilities to create higher-value products from oil.  Asphalt is essentially a by-product of the production of fuels from oil.  In 2007, measures were introduced by the federal government mandating efficiency increases in the production of fuels from oil.  While these mechanisms- often referred to as “cokers” used to manufacture the “Ultra Low Sulfur Fuels” we use today have become more effective, one of the results of the new refining process is a decrease in production of asphalt- further driving up the demand for the product.

The recession and housing collapse negatively affecting demand for roofing contractors throughout our state has done little to affect the costs we face as an industry.  Many homeowners choose to put off the replacement of their old roof with the hopes that they can get “1-5 more years out of it,” however, the economics of this decision are questionable.  In today’s market on the Front Range, an average roof replacement costs approximately $10,000.00.  An increase in price of 5-10% (which is very possible) can cost a prospective roofing customer $500-$1000 if they choose to put off their roofing project.

While the continuous increase in price for asphalt products has narrowed the gap in price with other roofing products (metal, synthetics, concrete, slate) there is no question that asphalt products continue to be the most efficient and cost-effective solution to the roofing needs of Colorado homeowners.  It will likely be well over a decade before a roof replacement with a different product can come close to the “bang for your buck” you get from an asphalt shingle roof.  A properly installed asphalt shingle roof designed to last 20-50 years will depreciate on that schedule.  At $10,000, you may only be saving approximately $200/year by waiting, and you could be risking potential price increases which are far greater than that.

So, fellow procrastinators and potential roof purchasers, before you put off that roof replacement for 1 more year, keep in mind the savings may not add up if you have the ability to purchase now.  And if you’re like me and you choose to put it off for another year, we Colorado roofers will do our best to keep the prices down for you, well, as much as possible.