Lumber prices and alternatives

Jody Treadway said:
This was in my email this AM. Something to read and ponder:
lbmjournal.com

NAHB: Record-high lumber prices adding $24K to cost of new home

The spike in lumber prices has caused the price of an average new single-family home to increase by $24,386 since April 17, 2020.
lbmjournal.com lbmjournal.com
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And all of that is offset by record low interest rates driving construction and home sales through the roof, thanks to interventionist FedReserve policies that are creating a massive bubble due to a fear of recession and a greed for hollow inflation.
 
jeepinmatt said:
And all of that is offset by record low interest rates driving construction and home sales through the roof, thanks to interventionist FedReserve policies that are creating a massive bubble due to a fear of recession and a greed for hollow inflation.
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And when that bubble bursts...
Then I'll build that shop I have always wanted when materials and labor are 1/2 what they are now.
 
jeepinmatt said:
And all of that is offset by record low interest rates driving construction and home sales through the roof, thanks to interventionist FedReserve policies that are creating a massive bubble due to a fear of recession and a greed for hollow inflation.
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This, for sure.

It's just making everything that much worse once things start to crash and interest rates become more reasonable again... homes will just be that much more unaffordable.

Also fueled by the classic American belief that we must build new houses instead of just making the most with what exists already... like about every other country has figured out.. It's crazy that "new home sales" is such a heavily used indicator of our countries economic health.
 
Jody Treadway said:
And when that bubble bursts...
Then I'll build that shop I have always wanted when materials and labor are 1/2 what they are now.
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half what they are now is still more than they were before :flipoff:
 
Jody Treadway said:
And when that bubble bursts...
Then I'll build that shop I have always wanted when materials and labor are 1/2 what they are now.
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I've been dragging my feet on some projects waiting for prices to drop significantly. Actually doing a concrete paver patio rather than deck expansion since prices are now virtually equal. Let us know when you see the bubble deflating!
 
simpleman01 said:
I've been dragging my feet on some projects waiting for prices to drop significantly. Actually doing a concrete paver patio rather than deck expansion since prices are now virtually equal. Let us know when you see the bubble deflating!
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Mid-January 2025 is my prediction
 
Jody Treadway said:
And when that bubble bursts...
Then I'll build that shop I have always wanted when materials and labor are 1/2 what they are now.
Click to expand...
They will never be half, unless the recession turns into a major, extended depression of historical proportions. Name one person you know who is making bank right now that 5 years from now would say "ya know, I used to do this for $50k a year, and now I've been doing it for $100k a year for a couple years, but I think I would be ok doing it for $50k a year again, even though the price of everything else has doubled. "
 
jeepinmatt said:
They will never be half, unless the recession turns into a major, extended depression of historical proportions. Name one person you know who is making bank right now that 5 years from now would say "ya know, I used to do this for $50k a year, and now I've been doing it for $100k a year for a couple years, but I think I would be ok doing it for $50k a year again, even though the price of everything else has doubled. "
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I thought GC did construction projects for cost plus. If costs drop 50%...... Maybe im way off idk.
 
jeepinmatt said:
They will never be half, unless the recession turns into a major, extended depression of historical proportions. Name one person you know who is making bank right now that 5 years from now would say "ya know, I used to do this for $50k a year, and now I've been doing it for $100k a year for a couple years, but I think I would be ok doing it for $50k a year again, even though the price of everything else has doubled. "
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Materials will certainly drop back to where they "should" be, historically speaking. They're heavily inflated right now because they can be. As long as people are willing to pay $32 a sheet for 7/16 OSB, it'll cost $32.
I think (I'm no economist or anything, obviously) when demand for construction slows back to a reasonable pace, builders/contractors/erectors/etc will have no choice but to cut their labor rate to compete. I see a slower market as a supply/demand thing. I hope for the good of our economy as a whole we don't see a true 2008 recession. But I do foresee a market correction bringing construction costs out of orbit.
Maybe I'm seeing things on a more local scale regarding shop build costs.

Until then, I'll keep buying cheap XJs and flipping them.
 
drkelly said:
This can't continue

www.cnbc.com

December home prices rose 10.4%, the biggest gain in 7 years, Case-Shiller says

December is usually the slowest month for the housing market, but price gains didn't slow down one bit in 2020.
www.cnbc.com www.cnbc.com
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my house is small and about paid for. ive wanted to buy some property with a house or just land. now im waiting until housing market bubble bust again. to many people over paying for it to not happen. and now with all foreclosures being held i see alot of them wanting their money back fast once they can foreclose again.
 
RatLabGuy said:
Also fueled by the classic American belief that we must build new houses instead of just making the most with what exists already... like about every other country has figured out.. It's crazy that "new home sales" is such a heavily used indicator of our countries economic health.
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I think you misunderstand the meaning of the statistic.

Primarily, existing homes aren't where people want to live. Secondarily, existing homes aren't the homes that people want to live in. In "every other country", people are generally too poor to tear a house down or significantly renovate it, or the government prohibits them from doing so.
 
83oldyoda4x4 said:
I thought GC did construction projects for cost plus. If costs drop 50%...... Maybe im way off idk.
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"Costs" are a variable when you are doing cost plus. See also "rebate".
 
Loganwayne said:
with all foreclosures being held i see alot of them wanting their money back fast once they can foreclose again.
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Depends. 08/09 commoditized the SFH market to a large extent. There are massive funds now that hold housing stock, rent it, and sell it again. IIRC, they're required to sell after 10 years, and they replace the sold properties with new ones. There are entire housing developments going up just to satisfy the churn. Foreclosed houses work just as well.
 
drkelly said:
This can't continue

www.cnbc.com

December home prices rose 10.4%, the biggest gain in 7 years, Case-Shiller says

December is usually the slowest month for the housing market, but price gains didn't slow down one bit in 2020.
www.cnbc.com www.cnbc.com
Click to expand...

1614096590677.png
 
I guess for someone buying a house with a mortgage, it is fine, but for the guy just wanting to build a shed or garage with money he saved, he is kicking himself for not doing it a year or so ago.
 
shawn said:
I think you misunderstand the meaning of the statistic.

Primarily, existing homes aren't where people want to live. Secondarily, existing homes aren't the homes that people want to live in.
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But this is an indicator of the problem with the American philophy to life.
This is clearly just my opinion.
Rather that up and moving, invest those resources into making it the home you want to live in, and the place you want to live. Make what already exists better instead of tearing it down and starting over. Learn to appreciate

In "every other country", people are generally too poor to tear a house down or significantly renovate it, or the government prohibits them from doing so.
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And that Americans are soft and lazy and wasteful because we have excess resources, and aren't forced to make the most of what we have, like eeverybody else.
 
drkelly said:
I guess for someone buying a house with a mortgage, it is fine, but for the guy just wanting to build a shed or garage with money he saved, he is kicking himself for not doing it a year or so ago.
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[raises hand] present
 
RatLabGuy said:
Rather that up and moving, invest those resources into making it the home you want to live in, and the place you want to live. Make what already exists better instead of tearing it down and starting over.
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I agree, turn it into what you want instead of buying a new tract home with an HOA. Just start with something that makes sense. But, turning an old tract home into a new tract home is sometimes throwing good money after bad.

I'm just starting to get elbow-deep into this shit right now with our house. Need a garage for workspace though, else I have to pay the man for too much stuff. We love the house, but its pretty much a 1989 time capsule.
 
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