Lumber prices😳
- Thread starter giles
- Start date
Buckmaster
Senior Member
This was created. Opportunity was perfect and the consumer was taken. Luckily, Americans did what Americans do and stopped buying. We don't get lumber from china...and that seems to be the real hold up on products/parts/pieces.
So for you guys with more knowledge than I. Continue to hold on thinking about building a home or...?
I respectfully disagree, at least in a "blanket statement" application. As you know and has been mentioned here before, I worked in the forest and wood products supply chain for 2+ years and it's incredibly delicate. Lots of mills shut down for 8-12 weeks last spring. A lot of material was diverted for pulp and paper products that would have otherwise been made into lumber and other value add products. Demand spiked significantly while the supply chain was in duress. Factor in a government that pays you more for "carbon credits" than you can get for your timber and cutting stops, which further backs up the supply chain. Sure, there are people that made decisions that were advantageous and predatory, but that's not the only factor that contributed to this. You can peel off one layer of tin foil cause there's some legitimate economics at play here, too.
IMO, the market is still volatile and the opportunity for 20-40-100% price increases on components still exists and unless you can build with a "price guarantee", I'd suggest waiting, but that's just me.
Remember building a home isn’t just lumber. It’s excavation, stone, concrete, siding, electrical, plumbing, etc etc etc. All of those things are still fetching a premium price. Yesterday, 4-inch PVC was $5 per foot and was slated to increase another 5% by today.
I’m the end, the decision to build or not to build isn’t as simple as “are prices up or down.” The interest rates are still quite low and that is what is keeping things moving. Over the course of 30 years that cost of borrowing is still currently offsetting the high cost of materials and labor. One just needs to decide whether they want to take advantage of the low interest, or wait out the material spike and pray the interest rate doesn’t go back up. If the interest rates skyrocket again, the housing boom is gonna flatline.
Buckmaster
Senior Member
I was referring to the perfect storm being created by the "pandemic". The housing shortage is real. And as long as we keep our borders open and keep taking on refuges, it won't end. Builders and banks put a stop to the crazy jump. Now we need to find a happy medium for all to be beneficial. We also need to figure out how to make all these products in the states.
As far as the tin foil...well...the government has the wheel right now. Driving this bus straight into communism. I don't feel like I could fall asleep on this here ride. So i'll keep my tin foil helmet, thank you very much
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We purchased a significant amount of lumber for a project in April at the “peak” of prices. Had we waited until now to purchase the material we could’ve saved roughly 40% on the project. BUT we would just now be getting started and very much under the gun to get it completed before the snow flies since we are doing the work ourselves. Would I have loved to have paid significantly less? Yes. Do I regret spending the extra coin and being as far along as we are at this point? No. It’s a cost benefit analysis, really, for each individual situation. Value is subjective i.e., the importance an individual places on a good or service
Treated 2x4x8 is $2.98 down here…. Lowe’s and Home Depot are priced the same….
Time for me to replace my stockpiles that I used up during the spike. 
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Picked up some lumber for the first time in ages last night at lowes. Prices were very tolerable. Not quite back to normal but what I suspect is the new normal. 2x4x8 choice $4.07. 1/2 3 ply OSB $23.00. 2x4x12 $8.07. The strange thing. 2x4x12 were more expensive by a few pennies than 2x6x12.
Our 9am call was for the Next Gen Sourcing (NGS) project we have been engaged in since June. Based on recent and future auctions, you are correct we will be stable to a slight decline in prices. What a cluster this inflationary market has been!
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Actual Inflation or profit protections? I was reading an article yesterday that said despite scarcity of goods and reduced consumer purchases due to price increases, large retailer revenues are up around 36% YoY. I was talking to a trailer manufacturer a couple months ago and he said that due to limited inventory most have raised prices to cover the reduction in unit sales. For example, they used to make 20% on a trailer, but now with half the available inventory they raised prices to make a 40% on a trailer. Selling half the trailers but maintaining the same profitability.
Lumber and paper/corrugated is inflation as a commodity.
We have some containers coming across your front yard to Savannah and Houston now, craziness.
We have some containers coming across your front yard to Savannah and Houston now, craziness.
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Commodities are a good indicator of inflation no doubt. But I believe the bulk of the price increases we're seeing are to protect corporate earnings and not increases due to monetary inflation. Scarcity of materials and ability to produce products has caused artificial inflation of units to maintain earnings.
For example fortune brands net plumbing sales are up 26% year over year. A statistic that I would love to see in YoY unit numbers and not monetary net sales. In the first nine months of 2021, the company rewarded shareholders with a dividend payout of $107.9 million. The amount represents growth of 8% year over year.
For a company like many others who are struggling to source materials, products, and staff, those are some exceptional gains and shareholder returns in such a troubled economy. That can largely only point to one thing. Per unit price increases to protect net earnings due to lower volumes.
Wish it worked that way for us Mom and Pop shops. Service oriented local businesses could use some help. Not due to lack of work. Phones ringing more than it ever has in 24yrs. Not enough employees. Shortage of competition. Guys who mow on the side are getting so much more money and OT at their 9-5 job they are getting out of business. How can I hire a 20yr old kid for $10-12-15/hr if they can flip burgers for $15/hr? Start at local factory for $18-20/hr AND receive $1000-2000 sign on bonus and benefits in 30 days or less? I can tell you I am dropping some accounts next year and replacing with higher paying accounts. Got to start bidding to where we will be able to pay $15-22/hr if we want to attract a few employees. Unbelievable. I distinctly remember the first guy I placed at $10/hr to be a foreman. It was monumental. I was worried if we could still cash flow and cover the extra wages. It is laughable to type that out now. Of course, new trucks were $20-25k and not $40-50k. 7.5' straight plow was $3000 and not $5000. New mower was $6000-6500 versus $12500-15000. My fuel was well under $2/gal as well. Diesel was $1.25 consistently. But my prices haven't doubled. Times are changing. I'm getting older. Just need to keep up with the times I guess. . . . Or hang it up. (That isn't in my plan.)
Point being: big corporations can do this. It is a lot tougher for small service businesses to jump prices to protect profits. Our costs are up, but we can't inflate prices like the corporations very easily.
Point being: big corporations can do this. It is a lot tougher for small service businesses to jump prices to protect profits. Our costs are up, but we can't inflate prices like the corporations very easily.