LUMBER PRICES ARE SOARING
The COVID-19 Pandemic strikes again; first it was toilet paper, now it’s lumber. With wood in such high demand, lumber prices are soaring. So now building a deck is almost as expensive as buying a car.
DEMAND AND SUPPLY
The cost of building a deck varies widely depending on several factors:
- How much prep work will it take to get the site ready?
- What kind of foundation will you need?
- Is your house at ground level or will you need a raised deck with steps?
- Will the deck be tiered?
- What kind of wood, pattern, stain/finish, etc.?
The list goes on, but one sure thing is that, today you will pay 2 if not 3 times, more than you would have paid to build a deck this time last year. Even if you’re handy and can do the work yourself, supply is limited. Log into any Lowes or Home Depot for instance, and you’ll find much of the pressure treated lumber is “unavailable” at your local store. You will probably need to travel to find in-stock materials. But, if building your own deck is still the goal, then you may want to try MRHANDYMAN.COM. They have a “handy” tool for calculating the materials you’ll need, based on the size deck you are looking to build.
Now, if you are like the rest of us who need the help of a professional, then you are really behind the eight ball. Because not only are supplies increasingly more difficult to get, but contractors are also stretched thin. The unprecedented demand on construction means that the average contractor is booked solid 2 to 6 months out. A February 4, 2021 FORBES.COM article quoted an NAHB source saying “sometimes when a contractor says they can’t start for eight weeks, it’s not because they don’t have room to put you on the books. It’s that they can’t get the materials”.
THE HOUSING BOOM
In our Kramer Engineers October 16, 2020 post, we highlighted 7 industries (not including the PPE sector) that saw a staggering increase in business since the start of the Pandemic; number 3 was the housing boom. Different factors are driving the buying craze. Some people are looking to find a more “remote office friendly” home. While millennials, who now make up the largest segment of the population, have started to nest. The result: both resale and new home markets are seeing an overwhelming surge.
But, since we are still living in the days of COVID-19 caution, many homeowners are not selling right now. So prospective homebuyers are flocking to new homebuilders to satisfy their housing needs. What does that mean? More demand on lumber, fueling material shortages and spiking housing prices.
Depending on the reporting source, the data may vary a bit. Last month a FORTUNE.COM article reported a 188% increase in lumber prices since 2020; while BLOOMBERG.COM quoted a 250% jump since last spring in their March 2021 piece. In either case however, as the largest single building material in the average home is wood, the soaring lumber costs are fueling the continual increase in new home prices.
NEVER SAW IT COMING
But how did it get this bad? Can’t they just increase lumber production? Well, it’s not that simple. A February 10, 2021 CNBC article explained it best: “…both mill operators and lumber dealers misread the 2020 market. Since housing starts and remodeling were weaker in 2019, they pulled back on production. The expectation was that 2020 would be much of the same.” There was no way to predict the Pandemic boom that was about to hit.
And the problem does not stop there. Although mill operators are now working overtime to try to catch up to the crushing demand, the mills still have to limit shift work and comply with distancing guidelines because of COVID-19. So, it appears doubtful that lumber will get to full capacity production in the foreseeable future.