Construction lumber prices

Willemjm

Willem
Corporate Member
The construction market is overheated at the moment and lumber producers are dealing with Covid-19 and government enhanced unemployment labor problems as well. Prices will come back into line once the housing bubble bursts and prospective workers are not making more money collecting enhanced unemployment than they would make working.
My experience is that once the rush is over, prices will probably no longer go up, but they never really come down much.
 

bob vaughan

Bob Vaughan
Senior User
As an aside, one might do well learning to work with plexiglass or lexan. There's going to be a ton of it available after a few years.
 

Canuck

Wayne
Corporate Member
6F65086E-BDDD-4E8F-9D83-AEFD698AD73B.jpeg
 

Pop Golden

New User
Pop
2 items: 1 my next door neighbor is a rep for construction suppliers. He told me not to expect price drops for at least 2 years.
2 Just watched a YouTube short on who's getting rich on this price increase. The land owners, timber cutters, truck drivers, aren't seeing a pay increase. Likewise the retail folks use a margin to price products. Their profits only reflect their cost. SO....... What's happing here? The profits are being scraped in by the large lumber suppliers. This is Georgia Pacific, Weyehaeuser, and their likes. This YouTube guy did a lot of research on this post. It looks like he's RIGHT! ! !

Pop
 

Martin Roper

Martin
Senior User
Lumber prices are up 232% and ‘could spiral out of control in the next few months’

Excerpt:
This supply and demand mismatch is largely a result of the pandemic. At the same time that state-mandated lockdowns caused mills to halt production, bored quarantining Americans were rushing to Home Depot and Lowe’s to buy up materials for do-it-yourself projects. That caused lumber inventory to plummet. It only got worse from there: Recession-induced record-low interest rates caused a housing boom. In March, new housing starts hit their highest levels since 2006. Of course, new homes require a lot of lumber, thus exacerbating the shortage.
 

Martin Roper

Martin
Senior User
Just watched a YouTube short on who's getting rich on this price increase. The land owners, timber cutters, truck drivers, aren't seeing a pay increase. Likewise the retail folks use a margin to price products. Their profits only reflect their cost. SO....... What's happing here? The profits are being scraped in by the large lumber suppliers. This is Georgia Pacific, Weyehaeuser, and their likes. This YouTube guy did a lot of research on this post. It looks like he's RIGHT! ! !

I own a fairly substantial amount of Weyerhaeuser stock WY. My basis is $22.58 a share (1/4/2019) and it's $38.78 as of a few minutes ago. I bought it because it was paying a near 5% dividend, not because I expected it to jump this much.

Another company I've been tracking is West Fraser Timber WFG. Their stock has been climbing steadily in the past year. It's a sawmill company and they're doing well in this environment too.
 

Willemjm

Willem
Corporate Member
Personally, I think we are seeing unreported inflation, as a result of quantitative easing and the US debt clock going North.

No good having cash available, invest or spend.
 

lottathought

New User
Michael
So this is my question......how can the construction market be overheated? I have a pile of masks laying around and reminding me that we are in a pandemic. I vaguely recall, many news articles, just last fall that companies were seeing the value of "Work from Home". It would be highly unlikely that we would ever go fully back to the office setup. And the fallout from this would be a glut of buildings that are no longer needed. And did I not just see several news stories about businesses are starting to re-open but can't find workers, who would rather stay home on unemployment. So if a business does not want to build new buildings, people do not want the jobs that would include building, then can somebody please explain to me how the construction market can be overheated?
 

Bming1

New User
Brandon
People who used to live in cramped quarters in large cities because they had to be close to work have effectively been liberated of their geographic constraints, and are moving to larger dwellings, either in their existing city, or often, in other cities. A lot of people are moving to be closer to family, now that their job doesn’t hold them captive to their location any longer.
 

Willemjm

Willem
Corporate Member
So this is my question......how can the construction market be overheated? I have a pile of masks laying around and reminding me that we are in a pandemic. I vaguely recall, many news articles, just last fall that companies were seeing the value of "Work from Home". It would be highly unlikely that we would ever go fully back to the office setup. And the fallout from this would be a glut of buildings that are no longer needed. And did I not just see several news stories about businesses are starting to re-open but can't find workers, who would rather stay home on unemployment. So if a business does not want to build new buildings, people do not want the jobs that would include building, then can somebody please explain to me how the construction market can be overheated?
The construction market is overheated due to residential building being affordable as a result of extremely low interest rates.
 

Billm0066

Bill
User
I can confirm the residential real estate market being on fire. I had a listing over the weekend get 82 showings and 38 offers. This was 40 minutes north of Raleigh.

My wife and I were going to get a bigger home but the market is too crazy. We want to add on but lumber prices are insane. Just waiting and hoping lumber will come back down. Or we will frame the house with maple.
 

jdennis

New User
John
That's pretty much my understanding as well, an unfortunate confluence of factors. Let's not forget the Canadian lumber tariffs either.
 

Bryan S

Bryan
Corporate Member
Went to Lowes Friday night to get materials to build the misses a table and got

6 2 x 4s, 4 deck boards, 4 1 x 4s and a 1lb box of 2 in screws. $128 with my 10% discount
 

Pop Golden

New User
Pop
Hi woodworker200, Don't feel like the Lone Ranger. I bought a 2X4 at Lowes. After dealer prep & options I dropped $7.00. Thank God I only needed one. This really is high-way robbery.

Pop :eek:
 

Premier Sponsor

Our Sponsors

LATEST FOR SALE LISTINGS

Top