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TIL: Lumber prices are absolutely skyrocketing (up 232% since the pandemic and still rising) [Up2: Back down]
- Thread starter Deleted member 31923
- Start date
That makes sense.
Have to hope that suppliers across the board see the prices and get greedy and want to capture as much revenue as possible with as much supply as possible. I don't really see a scenario where they collude to keep supply limited like the OPEC cartel or something.
My contractor called me up to see how things were going with the new workshop I built about a year ago and told me the cost now and I almost spit out my coffee.
Timing.
Timing.
I hope so too... especially with the manufactured products like Trex, etc., which have a chance to take an even bigger cut of the market because it's mostly petroleum products and some wood waste products (sawdust, waste) so they have more diverse supply lines, not all Canadian lumber.
If someone can jump out and under cut prices and ramp up manufacturing supply they can get a huge advantage. Thankfully I think the lumber and manufacturing supply market is too distributed to have a real cartel come in and control prices. The history of oil companies all being state/government-run made it easy for them to band together even when some were privatized
According to the futures trading for Lumber, price has started dropping since early May https://www.nasdaq.com/market-activity/commodities/lbs
Not sure how long it will take for the drop to be reflected in actual prices. I think the futures contract ends in July so maybe around the end of summer. Could always go back up too but looking at that chart, prices are cooling down
Not sure how long it will take for the drop to be reflected in actual prices. I think the futures contract ends in July so maybe around the end of summer. Could always go back up too but looking at that chart, prices are cooling down
I sort of follow the real estate market in the Vancouver area and the low supply is a problem. Even years ago contractors were reluctant to build more housing because of the cost of land, construction costs, taxes, permits, delays, and all the red tape they had to deal with. Now the cost of building supplies makes their decisions even easier. They're saying screw it. People complain about the price of real estate and rent but it's rarely worth building new housing anymore, especially with the current construction costs.
So I wanted to bump this as WaPo has additional updates/info on the lumber situation. Prices are still falling and correcting. Now some say the increase was due to inflation - and I typically understand inflation as the value of money declining due to a glut of money circulating in the system. Here, I think it kind of points to unprecedented supply chain issues coupled with strong demand driving up prices.
Lumber companies and home builders reported record profits due to the lumber increases. The lumber companies laid off workers and plants over the last year, creating a labor shortage. Now they're bragging about massive profits and talking about now having to lure workers back with increased pay/benefits. So I wonder how much of this was companies just not paying enough over the last year, prolonging issues with supply, versus the value of the dollar itself collapsing. Would it be typical for a company to have massive profits and soaring stock prices due to inflation?
No doubt that there are some inflationary issues happening, but I'd bet this is mostly driven by supply chain issues and the long-term mismanagement that was exposed by the pandemic. Operating at razor thin margins and capacity that didn't take into account the possibility of disruptions of any kind.
Lumber companies and home builders reported record profits due to the lumber increases. The lumber companies laid off workers and plants over the last year, creating a labor shortage. Now they're bragging about massive profits and talking about now having to lure workers back with increased pay/benefits. So I wonder how much of this was companies just not paying enough over the last year, prolonging issues with supply, versus the value of the dollar itself collapsing. Would it be typical for a company to have massive profits and soaring stock prices due to inflation?
No doubt that there are some inflationary issues happening, but I'd bet this is mostly driven by supply chain issues and the long-term mismanagement that was exposed by the pandemic. Operating at razor thin margins and capacity that didn't take into account the possibility of disruptions of any kind.
It would appear that lumber prices have now collapsed.
Just checked home depot and it looks like prices dropped a good 50%. 2x4 were close to $8 and now 3.40 something, plywood was up around $80 and is now down to 35
Great news!
God help you if you're paying someone else to do work right now though. Everyone is booked forever and ever out and labor costs are super high right now I've noticed.
We've become DIYers as a result.
Sounds like the right time for me to do some projects around the house I've been putting off.
Wonder if it'll go back up again just somewhat do to all the people who are gonna rush to get their projects they held off on done since the price dropped.
Well time to call my contractor again.
Building demand is still pretty high so I'd expect labor costs to stay high.
Interestingly the insanely hot housing market has actually slowed in Massachusetts... Boston and Worcester both had moderate drops in home prices the last 2 months.
Building demand is still pretty high so I'd expect labor costs to stay high.
Interestingly the insanely hot housing market has actually slowed in Massachusetts... Boston and Worcester both had moderate drops in home prices the last 2 months.
I ended up building mine over the course of about 10 months. A day off here and there and occasional work on the weekends adds up over time.
I thought that would be the case around me (central Jersey) but I keep seeing literal dumps selling for nearly 200K. We're talking home of hoarders that are going to be entirely gutted if they want to be made livable.
Marine plywood has dropped too so boat build is a go! Woohoo!
Edit: https://fred.stlouisfed.org/series/WPU0811 almost back to pre-pandemic in US
Edit: https://fred.stlouisfed.org/series/WPU0811 almost back to pre-pandemic in US
I saw some actually sort of steep drops in my area. Might be time for this ol' boy to buy something.
So why did the price go up? Lack of labor cut into the supply? Increased amount of demand as people at home decided to do some home improvement?
Considering real estate costs in NJ, that is cheap. Figure if you're good for a 500K mortgage, you get the home for 200K and get your motrgage set up as one of those for rehab (forget the exact name). You now have 300K to work with to make that house into whatever you want, which is a TON of money for a renovation.
Ice storm drained alot of resources earlier this year. So many homes needed repairs and I was one of the unlucky few that had to spend 20k redoing parts of my damaged house.
Supply constraints due to shipping combined with everyone and their mom doing projects. Ive not been able to get a quote from my contractor despite speaking and emailing with him 4 times. It's just wildly busy right now
Everyone and I mean everyone looked at the pandemic and thought "oh no we need to produce less" and completely misread demand across many industries.
That and the sawmills that stayed open were having production issues due to people being out for COVID. Hell that's still happening in many industries.
Lumber is also something with a several month delay in creation. The industry doesn't turn on a dime when they realized what the market was doing. Like some other raw material industries, there's also not a lot of thirst for investment since a glut in supply for an extended amount of time can crater prices and make the whole thing unprofitable.
And then since lumber is a traded commodity, Wall Street got involved and pumped the price up further on speculation.
Was getting quotes from contractors on new roofs.
Two were still charging $135 per board of plywood.
One guy dropped to $80 per board of plywood.
I think the 3rd guy is going to get a lot of business.
Two were still charging $135 per board of plywood.
One guy dropped to $80 per board of plywood.
I think the 3rd guy is going to get a lot of business.
Shipping prices and availability contributed to the fucked prices for non-domestic items.