We are in the final stages of building and we timed it pretty well. Our lumber package did go up $20,000 but it would be a lot worse now and with the interest rates being under 3% I think it will pay off in the long run.
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Originally posted by Shane View PostWe've been planning for years to buy some land and build at this point in our life, after our kids graduated college and got married. Perfect timing for interest rates, but terrible for materials cost and demand. We're getting close on some land, but I'm still trying to decide whether we'll start building ASAP or wait a few months. Trump's tariffs definitely played a major role in kicking off this perfect storm in lumber prices. Hopefully they'll cut the remaining tariffs soon, and hopefully the mills will kick it back into gear. I'm not holding my breath for either of those to happen though. Too much money being sent to the government and the mills, so there's not much incentive for either to do what they could be doing to get prices to come down.
Some interesting reading.....
https://timberlinemag.com/2021/03/ho...r-tariff-cuts/
Trump’s tariffs increased lumber prices? Please explain since lumber grows in the US and Canada and prices soared with the Wuhan Flu,
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We have planned for them to flatten-out mid summer, but the old prices will not return.
Lumber isn't the only issue now. HVAC, electric, and plumbing roughs are rising 8-12% after today for us.Comment
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Trump imposed 20% tariffs on Canadian lumber, which allowed US mills to jack their prices up accordingly. That's the purpose of tariffs - to artificially add cost to foreign competitors who are selling at lower prices in order to allow local producers to increase their prices and profit margins. The links I posted have quotes from home builder associations talking about it.Originally posted by Bill View PostComment
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Plywood and other sheet goods in our cabinet shop have gone up 40-50%, but solid wood has only gone up a few percent in most cases.Originally posted by BrianL View Post
The quality and availability of hardwoods has fallen off quite a lot. I have a stash out at our property I may have to dig into...
An industry economist predicated this sort of thing a few years back, with a lot of data to back it up. I bit on what he said in 2016 and leveraged our business with cheap money to add automation and better equipment to the point I could barely stomach it. Now we’re debt free again and running on all cylinders.
Glues and resin used in panel products are creating shortages for us. Years of paying our bills and being easy customers has paid off now when we need something. It’s still a weekly slap in the face struggle having a solid backlog and fighting to feed the materials into the machine. We’re building the war chest now for an eventual slow down with hopes of picking up some deals on equipment from those who missed the window.
Same economist presented the statement back in 2016, that if you don’t own your first home by 2020, you’ll likely struggle to get one and it will be a larger financial burden than ever before. Having bought my first house in ‘04, and some rentals in ‘06 and paying a mortgage on these houses in ‘09 that I owed twice what they were worth had an impact on me. Now I’m on the other side looking to cash out some single family rentals back into the first time home buyer market. Now with Covid and redevelopment happening, the one city expects me to notify them 90days before I list a rental for sale and do something to re home my tenants.
I don’t envy anyone needing a home, but they’re not my problem.Attached FilesComment
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I just received this from a trader we deal with regarding the structural panel market:
It was another wild week in the panel markets. Order files pushed out even further, inventories got leaner, and prices surged. Mills, wholesalers, and distributors were extremely busy, and customers were frantically trying to cover anything they could find.
OSB:
7/16” +35
15/32” +40
19/32” +65
23/32” +65
*Mills remain off the market on all OSB items
*Secondaries selling anything they can get their hands on at massive premiums to Random Lengths
*Best guess on order files is July/August
Plywood:
3/8” RS +25
15/32”-23/32” RS +50
23/32” STF +40
23/32” Plyform +60
¼”-23/32” AC/BC Sanded +10/+20/+40/+50/+50
11/32” Pine Sidings +40
19/32” Pine Sidings +50
*Mills remain off the market on most items
*Limited offerings are sold at massive premiums to Random Lengths
*All high grade panels like Sanded AC/BC, Pine Sidings, and STF are virtually impossible to buyComment
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A General Contractor here in Houston resorted to using Maple or Birch plywood for wall protection in lieu of typical plywood since he could get it cheaper. Steel is up, paint is up since the freeze screwed up some latex plants here in Texas.
The largest project here in Houston for the next couple of years just got shelved this week. Oil needs to get up in price, and production needs o get going again for Houston to recover. Austin is booming on the commercial construction side due to all of the Tech companies building there.Comment
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Crazy Inflated Home Construction Costs?
Originally posted by Eastwood View Post
My son built a 950sq ft house 6 yrs ago, it cost him $89,000 to build. He lived there 3.5 yrs and sold it for $175,000. The people who bought it from him listed it this past Monday for $279,000, and bam they had a contract on it by yesterday, for there asking price! Things have gone nuts in north Texas.
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This is how massive inflation works. One or two items sky rocket at a timeand excuses are made as to why. They scream every excuse except inflation.
Get ready. No telling what's next. IMO everything will triple in the next 5-10 years.Comment
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Home Depot has 3/4 standard plywood for $95Comment
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Things can’t continue at this pace. It will pop, at some point. This screams 2008 all over again.Comment
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I thought the same thing until I saw the 40 year guaranteed government backed mortgage loan adjustments. 2008 was foreclosure city... this new legislation will all but eliminate that.Originally posted by texasdeerhunter View Post
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I am not familiar with this new legislation but it sounds scary.Originally posted by BlackoutRam2500 View Post
Could you point me in the right direction or provide a link to some literature on the matter??Comment
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Check out the link in my previous comment. #88Originally posted by bigmike585 View Post
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