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Lumber futures have fallen sharply recently. It may not be a trend lower, but it is something to keep an eye on. Don't get stuffed at the higher prices, OP.
Dimensional lumber is dropping but sheet lumber keeps going up. Or is it the other way around? Anyway, prices are still volatile.
Shortage of labor could be in play also causing longer build times which would force them to focus on the more profitable jobs.
For the multi-family project I'm working on, labor is not an issue. There are plenty of framers who are eager to get to work as soon as we have lumber on the site.
I work in the world of commercial construction and every day I receive news of delays or cancelled work because the crazy prices right now. No, construction companies do not order materials six months before they are needed. Ordering in advance just adds to the price-the cost of warehouse space, the cost of an extra transport, the risk of damage or theft or other loss.
Keep in mind that sometimes builders are in the same boat that OP is--they placed an order with their suppliers and then at the last minute find out that their supplier won't deliver. What are they supposed to do then? They have a better chance of building a house out of gold bricks than finding another supplier with extra lumber available.
Many companies recognize that they are better to walk away from a contract, and deal with any flack of that, then start a project and have to abandon it half-way through because of material or labor shortages. But it's still the least-worst case that they are choosing, not something they actually want to do.
Last edited by MarianRavenwood; 06-11-2021 at 09:08 PM..
I work in the world of commercial construction and every day I receive news of delays or cancelled work because the crazy prices right now. No, construction companies do not order materials six months before they are needed. Ordering in advance just adds to the price-the cost of warehouse space, the cost of an extra transport, the risk of damage or theft or other loss.
I represent the owners in the construction of a 36-unit cohousing condo community. We've ordered and paid for lots of materials way in advance for a project that we hope will be ready for occupancy in Q1 2022. We have the flooring, windows, doors, and geothermal HVAC equipment sitting in a warehouse now. We are ordering the cabinets and appliances next week. Yes, there are warehousing and insurance costs, not to mention paying interest on the construction loan to pay for the materials, but we can't afford delays due to materials unavailability. We have 36 households who will be selling their houses and need to be confident we will have somewhere to move into.
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I just heard of someone here doing a custom that was told they could either pay another $63,000 or cancel the contract, due to the lumber prices. I also discovered that for people like me that do woodworking as a hobby, the prices of hardwoods and veneers are still stable. It's only the construction lumber that's gone crazy.
I just heard of someone here doing a custom that was told they could either pay another $63,000 or cancel the contract, due to the lumber prices. I also discovered that for people like me that do woodworking as a hobby, the prices of hardwoods and veneers are still stable. It's only the construction lumber that's gone crazy.
I know a builder who does development as well that's working on a relatively small (20-25 lot) development. They've had 2-3 buyers back out over cost increases that averaged $30k-$40k per house.
Good news ... the graph has been dropping dramatically this week. I hope this trend will be reflected in actual purchase prices soon.
Quote:
Lumber extended losses to trade below $1000 per thousand board feet in June, the lowest level since March and moving further away from an all-time high of almost $1,700 hit on May 7th. Demand continues to slow as Americans start to travel, book holidays and engage in activities that were restricted by the pandemic, instead of spending on home renovations and DIY work. Also, higher building costs and declining availability for wood are starting to weigh on the market by making construction and new homes more expensive and slowing the strong pace of home building. Although supply-chain disruptions persist and very few new mills are built, the rapid decline in lumber prices from mid-May suggests a bubble that has burst. Still, the housing deficit in the US hint construction and housing will remain a bright spot in the coming years, thus one can expect lumber to remain above pre-pandemic levels for some time. .
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