Lumber Bubble Burst! Why Your DIY Projects Just Got Cheaper.
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- Опубликовано: 19 июн 2024
- Lumber prices have eased out over the past year, but there is a coiled spring just waiting to be sprung and if that hapens, lumber prices will shoot through the roof. In this video I explain where we are, how we got here and what happens next.
#lumber #lumberprices #economy
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I'm a custom home builder focused mainly on large scale, higher end renovations ($500k-1.5 mil) and while we have seen lumber as a whole come down, many other inputs have not. Drywall, wire, pvc, all still crazy high! I think some corporate greed and a little price fixing has something to do with it also.
I just bought ten sheets of Sheetrock, wth?
you forgot YOUR labor! Labor prices are out the solar system in every department. Then when you pay it, you get half ass work from young kids who don't know anything because the old guys are retiring. I can only use semi-retired old timers now, everything else is more expensive for way worse work.
@holland3g1 Amen! I have a carpenter that's been with me 20 years and is semi retired. Only does smaller stuff for me. 3 young dudes together couldn't hold his jock. He's 65 and I can barely keep up with him!
Every major industry is effectively an oligopoly at this point. No competition.
Systematic gutting of the FTC since the early 90s is letting price fixing run rampant. Even the small time boomer landlords have been openly colluding using services that were specifically designed to facilitate price fixing. The commodities markets have been in a price fixing spiral since the last time they were called out on it, again in the early 90s.
I have no idea who this guy is but he is AWESOME! His insights are spot-on. I'm not in the industry or anything. I'm just a woodworker hoping to buy cheap lumber again someday.
Thank you for that great compliment!
Dude just gave a masterclass in basic economics. 👊
absolutely agree. the shortage of housing is to a great degree due to the private equity takeover of housing since the crash. in my town, which is a tourist town, much of the housing is short term rentals which does not help things. baring a major event, i do not see too much fluctuation in lumber prices this year.
The housing shortage numbers are inflated by the 10 million illegals Biden invited in but even with the shortage nothing is changing until there's an economic correct/collapse. If investors thought the only issue was Housing Shortage you'd see huge investments in Lumber but they know Government Spending is the real problem.
I really enjoy these types of videos and I appreciate your well-thought out explanations. Please make more!
Great summary of the issue. I especially appreciate you mentioning the role of commodity speculation and plant closures, which often go overlooked in more simplistic "pandemic demand" explanations. Another key factor that should be mentioned is the role of wildfires, which knocked out a significant amount of mature SPF stock in BC right around the same time. That's likely to continue to cause problems.
I started building my house in 2021 and delayed my first wood purchase about 6 weeks, which was enough time to buy the trough in between those two big spikes. Since I was watching it so closely already, I ended up writing my economics final on the lumber market. Thanks for giving an update!
Curious how lumber prices affect plywood? Shop grade maple at the big box near me is still $90 a sheet for 3/4". Price hasn't budges in 2+ years even though hardwood prices are down in that same period.
@jonmitchell6722 but why? Osb is down significantly from pandemic prices so I'm assuming glue supply chains are back to normal. What is keeping those prices high?
I've been putting off a project for for years now hoping the good plywood comes down. I may never make my project.
The busiest gas station's prices go up first, and come down first. Going up first doesn't hurt as much because people are habitual. They keep going because that's where they buy gas. As the busy gas station sells all their fuel on the drop, the new purchase is cheaper and the price he sells at goes down faster than the other three corners who are still selling the more expensive fuel. When you diy, renovate, or buy new, they build w OSB, not 3/4 HW. Your $90 sheets have been in the store for 9 months, so price is same. Look for a supplier that services cabinet shops, moulding supply etc. Their price per sheet might be more like $65-70. Still a lot, but a lot less still.
Good luck!
Love this! DIY Dave is good and is logical. This is a good channel to follow. Thanks!!
Low housing starts is also due to contractors aging out and young people not wanting to learn the trade.
That definitely has an impact: ruclips.net/video/-0fnVGyFlrM/видео.html
All I ever see is tons of Latinos who get hired by Trump voters. Same with dairy farmers.
In my area we legit have whole neighborhoods just built been sitting for years empty we have to much housing out here atm.
Sounds like people don't like getting screwed like the "mechanic shortage"
All I can say is lumber prices went down, and choices in lumber went up. So now I can finish my project that has been sitting for 2 years. I just bought about 400 dollars in lumber at HD, and it did not cost me that much, and it was a good lumber, I usually buy from a lumber yard and pay a higher prices. However, I paid for primeum pressure treated at a lumberyard when lumber was high, and within a few months, a lot of it started bending and twisting... I was completely disappointed and wasted my money. Now I shop around. But this can be a pain because of the gas I use driving all over to look at lumber. Anyway I was pleased with th soft lumber I bought, it was good stuff and cost me 1/2 the amount then a few years ago. Because of you, I'm watching the lumber situations much closer...thank you.
Wiseman thank you for your insight!
Regarding eggs...nearly 80% of the market goes go contracted supplies for other baked / food products / restaurants. leaving only 20% for retail egg sales. When egg supplies drop, contracted egg deliveries happen first and whats left over goes to retail. Thus the retail market takes the brunt of the supply disruption and the prices surge much more than seems like they should. A 10% reduction in egg supply means there is now 80% (as there was before) going to the contracts, 10% to retail and 10% is "missing". this amounts to a 50% reduction in retail supply, and that leverage causes significant swings in the prices. The St Louis Fed Reserve has retail egg prices history and the graph is very illuminating.
Wood vs Inflation. You have been very clear graphically and verbally of the retail costs of wood over the last 5 years, but keep referring to inflation as "runaway". I think if you look at the graphs you will find term runaway is inaccurate. And, yes, some market segments have had worse increases (residential housing) and some less, but over all current inflation, while still higher than the target of 2% is certainly not runaway. Unfortunately, while approaching the target rate, the drop has stalled out, and as you indicated, the Fed is in a holding pattern for the foreseeable future.
I fundamentally agree with your assessment of wood housing / wood price relationship, and that interest rates are likely to be the thing that breaks the current stagnant cycle in housing. Hoping some good news in the next few months will spur the Fed to once again lean into a rate reduction stance.
Keep up these very interesting videos.
That is a fascinating point on the eggs. Thanks for sharing, I will definitely take a look at the Fed's data.
Fair point on the term "runaway." A fairer term would probably be elevated, but there was a time when we had 7% and 6.5% inflation in 2021 and 2022 when I think the word "runaway" does make sense.
Thanks for your comment. Very interesting!
Actually, several companies were sued for price fixing of eggs. One was owned by a Republican Senator.
@@newguy6935 Interesting. Had not heard of the price fixing, but it doesn't surprise me, as any supply disruptions are used by some to raise prices even higher / gouge, with the hope of baking some of that increase as a "new norm". Something akin to that has happened locally. With the bird flu epidemic and the subsequent culling of millions of birds, the egg supply suffered, and prices rose significantly. As the supply began to recover and wholesale prices dropped back to near pre "bird-edimic" levels, some stores followed suit. Target did, and their prices fell as the wholesale prices declined. The main grocery stores near me did as well, though with a big more lag. Fresh Thyme on the other hand maintained the same high prices for many months and their prices, while somewhat lower, are still much higher than their near by competitors. NOTE: price comparisons were done on large / extra large eggs, in 18 packs, with no special attributes such as free range.
Thanks for the lead on egg price fixing. Going to look into that when i get back from my weekend trip. Time to have fun with friends and not be aggravated by the avarice of humans.
@@DIYwithDaveIn my economics class, I define "runaway inflation" as prices that can significantly increase every several days or hours and money begins to lose most of its value. We did experience rapidly increasing prices in some areas, but few people thought money was losing it's value to drastically increase velocity. I might be remembering incorrectly, but I think velocity continued to fall during lumber's most volatile months.
There are homes available. Who’s holding the homes? For what purpose are the homes being held? Artificial supply and demand fluctuations are the variables that have been and are manipulated at the will of ….. Fill in the blank…
Who’s data do we trust? Artificial data..
Hold what you have and buckle up for the ride…
Very informative! Thanks! Building is still crazy in boise!
I’m in north west Oregon and homes and apartments buildings are going up everywhere. I’ve never seen this much construction and I’m 53 years old and I grew up here. Construction has gone crazy around here every square into land they’re putting something on it
Another excellent video. In Ohio, low supply and demand hight for houses $150-$250. In the $500k range, and above, it takes a while for them to sell.
Thanks! I think that similar trends are happenening all over.
Here in western Washington state, all the OSB is coming from a single mill in BC, Western Fraser.
That includes generic nominal half inch 4x8s, the special half by 4x10 panels, and the 3/4 tongue and groove flooring stuff.
If the mill can't keep up, we pay.
Regular stuff, about 20 bucks, the others, about 25 bucks a sheet
I'm in Florida and we are seeing a lot more plywood coming from China. Previously we would see plywood from the US or Canada. I'm in residential building.
Rural central Virginia has houses going in like crazy. Prices and valuations spiked a couple of years ago and seem to be holding steady afterwards.
House construction has gone crazy in the last 2 years in SE Minnesota. And the prices are way out of range for most.
I’ve been following your videos over the past few years! Really appreciate your analysis and insight.
One thought about the housing supply issue: it doesn’t seem to be representative of every market. Urban cores are having the opposite problem compared to suburbs and rural areas. Nashville, where I live, reported a 17% vacancy rate in the downtown area at the end of last year, with 22k more apartments being built in the next few quarters. Of course, that’s just one city that I’m aware of, but it’s still interesting to see housing demand outside of the city grow while builders continue to build dense housing in an area that is already (obviously) not in demand.
Also worth noting that rent prices grew by nearly 30% in that part of the city over the last 3 years.
Good video and discussion on lumber economics. I think there are many factors contributing to the housing shortage. Contractors that have the ability to build are aging out,interest rates are an economic hassle and we have a serious shortage of skilled labor to make up for the retirement of experienced trades. Just my thoughts.
Ah. Exactly what I commented on in the previous video. I'm living in that area that is suffering from the largest growth in the Country. Housing and Apartment demand is unbarable at this time. A huge majority of the Citrus and Agricultural land is now becoming Developments. As I stated in the other post, my Inlaws just moved into a 600+ home development and a coworker just bought a home in a development that will have over 2000 homes on site. Those are just the two that I know details of. Everywhere I travel around my county, there are developments going up. I'm one of the beneficiaries of the 2008 housing market. I managed to buy a home when the market was down and now my home is valued at more than double what I paid for it. It was also bought when the mortgage rates were low. But, now I worry that my son may not ever be able to afford a home due to the inital prices being demanded nowadays. Even after the Market bursts again, the prices will still not be managable, I fear. In my area, what are essentially $175-250K homes, are going for at or over $500K, and there's no excuse for it other than greed and demand.
Home prices are insane in Maine and going higher. The cost of land is super high and limited availability. The cost of building material is in constant flux and most builders are quoting cost plus on building houses.
I believe the major factor in the price of land ( no matter how try you can not make more land)
Like Japan we have learn to live in less space. I remember when mortgage rates were 18 percent, we were told, we would never see interest rates below 10 percent
I'm in Farmers Branch Texas and I haven't seen any new building anywhere in the city. Homes in our neighborhood are all over 60 years old and any that go on sale get the standard interior make over with new floors, lighting, appliances, etc. At the height of seller's market a couple of years ago, a house across the street and sold for $475K and so did another a block away. They sold very quickly and the buyer may have paid more than the asking price as was happening back then. Now the house next to us is for sale and the initial price was $475K but has since dropped to $467.5. It has been on the market for two months now and I haven't seen many people coming to view it.
Here at the boarders of NC and SC, the building trade in Comm and Res are a gold mine do to new jobs and expansion. More people are moving to the South due to the high cost of living up North. NC, SC, TENN, and Ga. have been a haven for yrs. How long will it last, don't know? I’m in the home improvement business, and I'm taking advantage of it while last, putting my retirement on hold.
Thanks for the update. Here in Spokane Washington (eastern Washington) dimensional lumber is a bit above pre pandemic prices and remains flat. Sheet products are slightly elevated from pre pandemic levels. Many are moving to our moderate sized town from large cities for better quality less crowded life. Cities like Seattle, Salt Lake City, San Francisco. This outside money is keeping our home prices elevated. I don’t foresee home prices lowering anytime soon here. I think we are at a new cost plateau that people will have to get use too. Unfortunately wages always lag behind that in affordability.
In southeastern NH, there's a huge demand for single family homes yet the supply is ultra low. I've seen sporadic one-offs, two-offs built here and there in the past four years but at a pace well below demand. What is being constructed more are apartment complexes and condos. Condos, by the way, are significantly overpriced and are the least bang for the buck by a wide margin, to the point where those sales are flat, to my eye. I've just seen DIY with Dave for the first time and it was very good. I subscribed. Cheers.
Down here in NW Connecticut most of the construction is for 2 to 4 story apartments and condos. I don't see anyone building single family homes. Builders can't afford to build the typical 3-bed, 2-bath spec houses, so the only single family homes are for well off customers who come to them directly. Completely cuts the middle out of the middle class home.
Buy now. It is going to be a busy hurricane season. 1/3 of Texas & Louisiana has already had floods and storm damage.
So, build when material prices are low & interest is high. Write off the high interest until the rate drops then refinance. You can't re- the material or labor price but you can the interest.
We are seeing a ton of new building here in North Florida. It’s all new apartments. And with new apartment complexes come new grocery stores and car washes.
I am seeing a lot of new apartments go up near me here in Texas as well. While I am not opposed in theory, as everyone needs a place to live, I don't think that massive appartment complexes everywhere are the answer.
@@DIYwithDave Actually. That is the only answer. Because new land is never created. So if you want more people living in the same area, you must build up.
Here in Wilmington NC it's the same exact trend. They're putting up a ton of mini storage and gas stations as well. A lot of the new single family starter homes are being built in the next county over since the land is still cheap. Affordable housing in town is primarily being built by habitat for humanity.
Yeah , also the mill fires made a big impact to the price of lumber. Most of them have not rebuilt. I have not heard of any new mills opening.
The egg shortage wasn't due to birdflue. I can't remember what company or group or whatever did it but. Somebody bought a major feed company that provided bird feed for a vast amount of farm animals. That brand of feed was pretty much what everyone used for feeding their chickens. As a result of the changes that were made after the acquisition, in order to save money. People were finding that their chickens were malnourished and not laying as much as they used to. The bird flu outbreak was a result of that.
Lumber prices still not dropped in Australia or NZ!
Housing prices in Australia are still rising but slower than over the last 15 years. While in NZ, prices are stagnant to sliding, but still way expensive!
Cheaper in many parts of America, as is land
Dave: If you compare the average wage with the average home price, people cannot afford to buy because they do not qualify for loans. Lowering interest rates will give a slight boost but until people can qualify for mortgages the market will remain stagnant.
That is, if they keep their jobs. People are losing $50k a year jobs all over the place, and you never hear about it.
just like the eggs, the farmers didn't charge more when the supply got scarce they just sold less. the groceries stores got to pocket all that profit. I imagine its the same with lumber. the land owners, lumberjacks and mills probably didnt increase their prices all that much they still had the same supply, but construction material stores did.
I just looked up foam panel prices and it’s insane those prices are still so high
Mostly agree. But plywood is off the charts expensive. 5 or so years ago, maybe 8 or so.. could buy birch 3/4" 4x8 for about $45 or so. It's now $90 or more and was over $110 during the peak. It hasn't come down hardly at all. OSB/etc that used to be $20 a sheet is around $45 or so now. 2x4s have come down.. they were running $11 for 8 ft during peak. Now they are back down to about $3.25 or so. Not sure about other wood, I've only used 2x4s and plywood/birch for projects as a DIYer. But Birch is so stupidly expensive that I bought a planer and a table saw thinking I could probably rip down 2x4 and 2x6 into 3/4" to 1" strips, glue up and be cheaper than birch plywood while having stronger wood overall
Building in carson city nevada not slowing, lumber prices have come down, concrete though had been 125yrd 2 years ago here, now, 260yrd. Halted my simple 44x60 shop project 20.8k just for concrete 50k to place a slab on minimal level required lot. Industry can't sell homes with current interest Yerevan here no slowdowns on building or contractors scalping locals on simple garage projects, something seriously wrong with current economy and justifying prices normal people cannot afford who are buying here in Northern nevada?
We hopefully will see innovation, bring back home sizes that were built in the 50's and use 1/3 or less material. Talking bout houses.
So tell me why I paid $20 for 2 8 foot pieces of primed 1x3. Prices are not coming down.
I'm seeing mostly rentals and lot homes built in Wisconsin.
We will have more HOAs and Rentals than single family homes.
However 2023 units kept up with population growth in Wisconsin last year if you look at unit per person ratio.
Wisconsins aging population will start selling there larger homes and acreage soon IMO
Hopefully they will want new small homes that are more affordable and young families can occupy their large homes.
There is still a lot of building in the greater Denver area. Home prices have gone down a little. Days on market has increased slightly. I think the biggest difference is that fewer people are selling. I purchased my home in 2016. If I sold, I couldn’t afford to stay in the area. Even with all the equity my home has gained over the last eight years.
One out of 5 homes are bought by investors also sharply reducing supply. The government could legislate against this.
That is true and it is definitely a new wierd development. I don't know what it means long-term, but I don't think that is good.
yea, if you really want it F??...ked up, let the government get involved with fixing the problem they caused
The government also could have stopped the illegal invasion of eleven million people across our southern border . This has been the motive for large companies to invest in RE .
@@ada-yw1bb Do nothing congress refuse to bring the vote to the floor of a Republican's border bill because Trump said if they did he has nothing to run on.
@tweb3282 : The Dumocrat bill that the house shot down allowed 5000 illeagals a day to enter the country.
Along with the chain migration that comes afterward, that would be well over 2 million people a year .
That's no plan at all , it's suicide and would have put even more pressure on housing .
I wish he was right but the price of lumber in my area went up again. I'm hoping it goes down soon, paying another 20 cent per item doesn't sound like much but it adds up quick.
I don't even know how to bet on it, but when the DIY channel is talking about interest rates, we've hit peak market.
I build fences for a living. Prices have definitely gone down on lumber but not far enough to give my customers a noticeable discount. Everything else is still where it’s been since the pandemic days.
more building in Sussex county Delaware and prices are high
I would not expect single family home building to increase appreciably moving forward. What I see happening is more multifamily construction with alternate building materials. Expect denser communities moving forward with cookie cutter construction using manufactured construction materials versus the basic 2x4 stick builds. As I drive around (and between) the Triangle and Charlotte in NC, I see Texas block construction in the middle of nowhere, away from employment centers in anticipation. Why? It's the future. No new land within beltlines with commute costs and traffic worsening. If you get a startup single family community built, they will be much smaller, likely single level, and on slabs.
Come on man anytime big corporations can gauge they will gouge. Their pockets is all it matters not your families not your lifestyle not your needs or your health.
Happy for you, but they sure aint dropped much where I am.
I believe in cycles, and there is a very high chance that interest rates will go up for the next 30-35 years, as part of a 40 year cycle. Hopefully I'm wrong, but cycles drive everything.
Apartments are going up like crazy around me.
Let's not forget the 2 guys that posted a video of train cart loads of lumber which helped drive up the price because of scarcity
Is there anywhere to get assistance for wood to build a 12x12 shed with a door & two windows along with an opening to accommodate an air conditioner? I am legally blind & suffer from health issues associated with lupus, fibromyalgia, & Sjogren’s disease. My one love is throwing pottery. I’ve been sharing a corner of a shed with a riding mower & large generator (in North Carolina where we are prone to hurricanes that can leave us without power. I’ve managed to use as little space as possible; however, I’ve reached a point where I need a glazing table, storage for glazes, shelving for new pots, along with room for the already used wedging/hand building table, pottery wheel, hot plate to heat throwing & clean up water, small microwave, window unit air conditioner, small air compressor, tools, etc… I’d like to have room inside to add a wall (propane) heater. I’d like to have a lean-to area outside under a lean-to area for an outdoor sink & pottery kiln. I’ve been watching out for a cheap or even free kiln.
I’m unable to drive & I live in an area where you can’t go anywhere really without transportation. Outside of doctors’ appointments, I’m ok with being at home as long as I can stay busy. I grow vegetables in the spring, summer, & part of the fall. I’m pittering in my pottery corner all year. My doctors are all happy that I keep busy. It helps physically & mentally. I’ve simply outgrown the small corner of the lawn mower shed & there wasn’t much space to begin with.
Any information or assistance is welcomed & appreciated.
I feel like you could explain any subject, and I would understand it.
That is an amazing compliment, thank you!
@@DIYwithDave Thank you for the great videos!
Not a lot of houses being built, but whole lot of apartments complexes being built.
Why has Cedar jumped in price? I was paying $1 a foot for 5/4 and it went up .55 cents this spring.
I paid $35 for 8 ft of 2x6 a few months ago. That hurt.
Yet contractors are still changing the same price for materials as if they were still at an all time high.
The Price of Lumber has actually decreased in my area, but it's because there's been a massive spike in building Apartments & Lowes wants to unload as much lumber as possible.
Don't buy anything for 8 months
Dave - you really need to talk about the impact of aggregate inflation.
Sure can we also talk about aggregate wage increases?
@@MrSteeDoo absolutely, but they it won't match aggregate inflation. In fact, while lower wage jobs, fast food, factory work, etc, have seen decent increases, there have been significant decreases in the middle-class white collar jobs, such as IT, business, and finance. Healthcare seems to be the one anomaly of middle-class white collar jobs that have gotten raises.
@@better_than_nothing it doesn't need to match aggregate inflation PERCENTAGE-wise. Wage inflation affects ALL of your earnings. Price inflation affects only the percentage that you spend.
I'm fact, for me, my housing costs are flat since I have a fixed rate mortgage. My auto costs are flat since my $3k car is paid for and has years of useful life left.
@@MrSteeDoo 35% of the country rents. 40% of the country has a car payment. Additionally, the vast majority of cars north of the Mason-Dixon line have to be replaced every 10-12 years. Since Biden took office, the amount of Americans living paycheck to paycheck is now at 70%, meaning 70% of Americans are spending their entire paycheck and inflation is impacting every cent of it. So before you make another asinine comment, please ensure you have an inkling of an Idea of what you're talking about.
@@better_than_nothing Clearly if 70% (as you allege) of the people living PtoP then many are making a mistake by having a car payment (or two).
My car is a 2006 Scion with very little rust. I bought it for $3K with 50K on it. It now has 85K. I am in WI. Does that make my story an "asinine" one? How can it be if it's the truth?
In fact why did you go all high voltage on me? The only true certain thing I can tell is my own lived experience.
I wonder how many of those PtoP people wish they hadn't gotten all those tattoos or that new IPhone? LOL.
Stupidity and financial carelessness happen no matter who the President is.
I disagree with you on the 08 house bubble, it was the banks giving houses to people that couldn't pay for them such as 0 down. Now on the housing shortage I think the main reason for that is divorce now a family has to have double the living space.
OBSERVATION...where are u seeing these decreases? Home depot is high and their quality is even crappier
the bid desks are not giving discounts... dont see how it is going to get cheaper
All I know is the lumber quality is in the garbage. The 2x4's from home depot are damn near unusable, the #2 grade is really 3 or 4, all the lumber has like 6 rings at the end now meaning its very young, and not very dense/strong. And any posts you put in the ground are rotting faster than ever. 4x4 are supposed to be center cut so they don't warp left or right, really have to pick through your 2x4 and 4x4 these days. Big box stores are basically out for lumber, have to go to a lumber yard. Lowes seems to have much better 2x4's than home depot at least. Not to mention vet parking and trailor parking. My home depot has neither.
The one thing that will not inflate no matter how much shortage is labor.
Another problem is people buying homes with their wealth to rent and never sell so everyone in the lower wage class is forced to rent forever. :/
What's wrong with this picture is that the person goes out and cuts the lumber and take it to a mill is not getting any increase in income for the lumber but yet prices doubled at the lumber stores......explain that !!
If they aren’t happy with it Then they shouldn’t make the deal at that price.
lol ok dude, prices are still higher than willy nelson, and plywood still double or more than prepandemic, cedar higher yet
Stanley simply had good marketing people that took opportunity of years of dormancy. They took a bigger market share by marketing to the people they never reached before.
Other topic is homelessness estimated to triple in next four years. It’s going to get a little scary until something happens. It will only go up after the 2030 predictions too. Large portion of about 1/3 of them over 65 and almost all with medical issues.
High priced crap homes constantly being built but remaining empty.
Nothing like a lead mug to drink from.
Why is this DIY channel better at explaining the economy than financial channels?
BS! a 7/16 osb sheet BEFORE was $9..... i just checked its $18.85 still DOUBLE the price it was 4 years ago! and a 2x4 is $3.75
NO houses for sale in Rochester, NY. Market is dead here.
How's the job market there?
The real estate bubble has started to burst. The builders have been knocking out a ton of new homes (indicated by the addition of a million new listings from just last year) and have been eating up the building supplies. Thus, driving up the prices. Now the prices are dropping, the party is over, and building has slowed down tremendously over the last few months.
Lumber prices are finally showing that slowdown. The more they drop, the greater the indicator of the deflating real estate balloon.
Things would be easier if it wasnt for all the houses being built being either fkn mansions or giant apartment complexes. Nobody just builds a simple house anymore. Its all investors or the rich... prices are javked up becsause those people can afford it, and regular folks cant afford to build because nobody is interested in their "small" money
The real world says you're wrong. $25+ for 1/2" sheet of plywood and $3.65 for a 2x4 *on sale* are not "bursted" prices.
Must mean no projects in the near future 🤣
Bottom line it is called Price Gouging
No, it's called supply and demand. The only way to slow demand is by raising prices. Lowering prices raises demand. Basic Economics 101 ffs.
What a lazy opinion. That’s the nicest way I can say it.
You present a lot of good information, but then you reach some rather debatable conclusions. The conversion of commercial real estate into rental units is likely to address much of the housing shortage, while the likelihood of interest rates ever dropping below 4% again is extremely low. We are probably going to continue to see the trend of fewer homes being built because inflation is rapidly exceeding wage growth, resulting in fewer buyers being able to purchase a home. Less buyers, less homes, higher prices, more people renting...those are the trends.
Not sure that will happen large scale. Few comm bldgs with adequate water/sewer/power infrastructure and retrofitting those costs BIG $$$ so no way to make affordable housing units out of them unless the comm bldg is basically free...
15 million vacant homes in the usa
I just went to the store the other day.. plywood is almost $100 a sheet.. I don’t see it getting cheaper
Where are you and For what product? Here in Texas, 3/4 osb sheets are about $26, 11/32 osb is $22.50, Sande plywood is $65 and birch plywood is $80.
That must be for a hardwood ply. Here in over-priced CT. 3/4" 4x8 CDX is $43.48 at the orange big box store, 10 minutes from me. Tongue and groove 3/4" OSB subfloor is $24.00 even. Those are the ones that matter in the construction business.
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Inflation is transitory. As long as inflation increases so will prices. This includes Lumber. Sure they are cheaper now than last year. However they will never be as low as they were in 2019 because of inflation.
End the Fed!
High or persistent inflation would be worse than higher interest rates. Decreasing affordability decreases demand which decreases prices or causes profit compression, layoffs or increases in efficiency. The bill has come due from the great recession, covid, stimulus checks and high government spending. Dollar dilution will probably continue. I don't like the fed or the governments ability to make my money worth less or worthless anymore than anyone else. Rates were held too low for too long or were they, if you look at gdp growth during years with low rates unless the growth was significant then the rates must have been appropriate at the time to not tip us into a recession. Low rates post covid recession recovery and stimulus checks or increasing money supply and expanding the fed balance sheet and Trump calling Powell stupid for wanting to raise the fed rate causing him to alter course that led to worse post covid inflation than we would have had. Some things that got us here. Sure here sucks but there is no way around it. I think Powell is a fairly intelligent central bank chair. His spreading optimism about rate cuts has kept the stock market and bond market hopeful due to corporate debt rollover and going into an election year but I think he has always just been telling them what they want to hear. It makes no sense for him to cut rates with gdp growth, low unemployment and higher than target inflation. Everyone knows that but they act like they don't or it just garners attention because it's what people want.
Goodluck, the board of governors has no legitimate authority, because the FED is a private bank, not a government entity. It has complete autonomy.
Interest rates aren't High. The 50-year average is 7.66% the ridiculously low rates of the last 12 years have skewed everyone's perspective of what is normal. Rates are exactly where they belong and need to stay here for a very long time. Artificially low rates created the problems were in and looking to lower rates as a solution will only reignite the bubble
Maybe everyone who thinks the mills are ripping everyone off should buy their own company. That way everyone can buy at bargain basement prices.
I did buy my own saw mill $5000 in 2020, 4 years later I can produce my lumber at a $1 bf and my cabinet business is booming.
So you are saying we should brutally end the Federal Reserve?
That would end inflation.
You don’t work , much less for nothing don’t complain about labor . The people doing the work are more valuable than the people who pay them.
New housing/apartments/hotels/retail still being built here in California. I see reasonably robust activity - higher interest rates have not (to my surprise) affected the market appreciably. Home prices are still rising and many are cash buyers. Not much supply available, so it's still a seller's market.
Beware of reading much into lumber futures - it's a relatively tiny commodity market and is notoriously manipulated (covid was a prime example).
Biden years have been fantastic for us - our wealth has increased significantly, vastly outpacing the moderate cost of inflation. We've reroofed our house this year, and about to start an interior/kitchen remodel - next year will be large solar system - mid 6-figure spend so we like lower lumber prices - they've more than offset other cost increases. Contractors are all booked up for months - getting work done requires patience.
Lumber prices will NOT be coming down ever again. The record number of significant tornadoes and widespread damage to structures will keep demand high. While the supply chain continues to fall apart, prices are going to go up... WAY up.
I'm pretty sure we can put that whole "supply chain issues" thing to rest.
Ok, except this idea that there aren't enough homes to fulfill demand is an urban myth, at least in the US. There are literally millions of empty homes that are being kept off the market by "investors" who would rather the housing be kept empty than lowering the prices down to a sustainable and achievable price. There is way more at work in that market than simple supply and demand, and presenting it as such is disingenuous at best, and willfully obtuse at worst. I know you are looking at this through the lens of lumber prices, but that is the tiniest portion of what is impacting the housing market, if you're going to try to speak to that subject, you need to do a LOT more research, because currently you are simply reinforcing falsehoods.
Chaos, rampant inflation, uncertainty = Brandon! 😂
in northern Canada homes selling fast in decent neighborhoods. But we have the whole lumber industry collapsing because of a woke government. And Canada ships lots of lumber to the US
Anything you don’t like is woke
Keep blaming woke on anything, remember you just woke up today
I want reparations from everybody who voted for joe Biden!
Stormy said the same about mushroom.
Agreed lol
Come on man.... it's bidenomics everything is great!!
Biden has nothing to do with housing prices or lumber imports. The guy responsible for the interest rate hike was Powell, chairman of the Fed, who btw was appointed to the job by Trump. That is an org that the presidential administration has little to do with except appointing the people on it, pretty much by law. It’s otherwise independent.
Housing prices are also deeply affected by the rise of corporate investment, buying up housing starts etc with free cash, making it harder for individuals to get in the game. Blame capitalism for that. What, you want government to stop that? That would be socialism, eh?
Biden used to work at a lumber mill
@@thewolfe1099Biden used to work everywhere
Bidenitis
Work?
Don't blame the pandemic, not solely
a certain president has a little to do with it, as well. 😢
Thanks for putting the blame where it belongs, on the Orange Jesus closing the door on software lumber imports from Canada.
Live in Plymouth Ma.The state leaders being moonbat liberals,we have the only right to shelter law in the USA.As a result we have been overun by illegals!You cannot find an apartment/room for a reasonable price at all,hell you can,t even find them.This has put great pressure on land ,home and condo prices as they are through the roof! It is so bad that the state has forced towns to change their zoning laws to allow appartments and condo projects in areas where only single family homes were allowed.As an example my in-laws live in Waltham,Ma(town outside of Boston) and right next to their single home they are building a four story condo building!!! The only way the developers got this passed and approved was by using this law! It's crazy!
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