The wood prices are coming down (hallalujah!) because we finally popped the wood bubble. People decided they weren’t going to move because they couldn’t afford to build. But we’ve seen nothing but price increases coming down the pipe, and the average customer has no idea they are going to hit them yet. Availability is already tanking…the lead out on appliances, china, pipe, and things like water heaters is bad now, and will get worse. For at least a couple of years or more.
Keep a really close eye on your costs…I’m afraid the consumer price is going to pull a kangaroo within a month or two. I know, I’m not guessing…we’ve been coding the price sheets for the wholesalers. As they sell whatever inventory they have on hand, the price is going to jump. We’ve been hit with 25 price increases in the last couple of months for the few lines that we represent, and the prices have jumped from 12% to over 200% on the different products. (Wholesale…the consumer price will be higher. And that’s before considering shipping costs…a container has jumped from $1500 to over $10,000. For one miserable freaking container.)
Really rough numbers:
20-30% increase on steel, metal and iron (appliances)
40% increase on water heaters, and low availability (limiter is the foam insulation which got creamed during the TX freeze.)
200% increase on PVC pipe/fittings/ plastics (including acrylics)
12% increase on china (now is a good time to pick out your toilet and lavatories, but those will be hit by the shipping costs.)
I wouldn’t want to try to build a single family dwelling right now…the things needed might not be available if it hasn’t already started. Priority is currently directed to multiple family units like apartments or condos, to house the families who will be displaced due to the shut downs. (Expected as soon as Biden lifts the restriction on mortgage holders…people will be getting turfed. They will need a place to live. Builders know this, and they are focusing on multi-family units now…they have to be ready before it happens. Going to be exceptionally bad in and around larger cities.)
Granted, this might just be in the Texas area, because we’ve had a tremendous flood of incoming transplants. Might be better in a small town.
If giants like Home Depot and Lowes can’t keep lumbar in stock and had to have dramatic price increases, is it honestly surprising that GF did too? When it comes to getting raw material, GF just doesn’t have the buying power of the giant suppliers and they could hardly keep anything in stock, so I was actually really surprised with how long they held off before having their prices jump so dramatically too. And wood prices are falling, but I’m sure they won’t make it back down to pre-pandemic pricing because once you get consumers to accept huge increases in prices, you don’t have to drop it all the way back down to keep them happy.
I’m not 100% sure that I’m in agreement with that, especially when it’s commodities. Oil is a good indicator of this — remember WTI trading at around -37bbl? Ultimately, this is an incredible black swan event, with contributing events across a massive spider web. All connected but not directly.
As for the article mentioned above (pretty sure I read the same one), I’m always hesitant to believe in quotes or forecasts from traders who generally are supplying quotes based on their monetary interests (the trader who is long is going to have a very different quote than the guy who is short).
If you want to get an idea of how some of these stories are going to play out before they are written, join HARO (Help a Reporter Out). You’ll get daily solicitations from reporters asking for quotes to write their story around.
For example, an article like this could be solicited with, need quote from trader who is long on oil calls.
This price increases is ridiculous. The hard wood market wasn’t hit by the issue with standard building materials. Pine standard plywood prices increased over the last year. I do a lot of work with hard wood and acrylic as part of my job, and those markets where not affected by standard home building materials. Last month the price on home building materials went down. The bubble popped and we are seeing a decline in prices and should see it normalize within the next year. This is glowforge and possibly the supplier taking advantage of an unrelated situation to take the blame of increased prices.
